Loan Opportunities For People with Bad Credit

You may need a loan to buy a car, home or something unexpected. Today, bad credit history can be an obstacle to getting a loan. However, there are still many lenders who are willing to approve your loan application with a higher interest rate.

Bad Credit Loans

You may need a loan to buy a car, home or something unexpected. Today, bad credit history can be an obstacle to getting a loan. However, there are still many lenders who are willing to approve your loan application with a higher interest rate.

Here is the ultimate guide for people who need a loan with bad credit. You can find answers to questions such as how to get bad credit loans online, which credit company is best for bad credit, the easiest way to get credit cards with bad credit and whether there are guaranteed approval for bad credit.

Good news is that bad credit loans may even enhance your credit score if you make the payments on time and keep the balance under control.

Bad Credit Score Range

There are three independent main credit bureaus: Transunion, Equifax, and Experian. Each has slightly different models with different score ranges which is between 280 and 850.

RankTransunion (VantageScore 3.0)EquifaxExperianFICO®
Poor300-550280-559300-499 (Deep Subprime)300-579
Fair550-649560-659500-600 (Subprime)580-669
Good650-699660-724601-660 (Near Prime)670-739
Very Good700-749725-759661-780 (Prime)740-799
Excellent750-850760-850781-850 (Super Prime)800-850

Also, every lender considers credit scores differently. So, loan requirements can vary depending on lender. While some lenders accept that 600 and below credit scores are bad credit, 580 and up are eligible as good credit for some lenders. On the other hand, based on FICO® Score, below 670 is bad credit.

Bad Credit Loan Types

Unsecured personal loans, unsecured credit cards for bad credit, secured personal loans, peer to peer loans, payday loans, installment loans and guarantor loans are available for people with bad credit.

Payday Loans 

Payday Loans are a small amount of loans (up to $ 500), it cannot be called a bad deal. As long as you have an income document, it is an option that you can apply when you need money urgently. However, we must say that the high interest obligation is a disadvantage due to a small amount of debt.

Peer to Peer Loans

Peer-to-Peer Loans are a method of matching borrowers and individuals who want to lend money. Debt amounts typically range from $ 4,000 to $ 25,000 and interest rates on these loans are high.

Guarantor Loans

Guarantor Loans are unsecured loans that your guarantor is responsible for paying off your debt if you cannot repay it on time. Interest rates are lower than previous ones, because the bank or lender knows that the guarantor will send money to the account on time, even if you can not.

Installment Loans 

Installment Loans for bad credit are personal loans that lenders give borrowers an opportunity to repay by installments.

Best Way to Repair Your Bad Credit

Banks report their borrowers’ account activities to loan offices every month. Sometimes, getting a new loan or having a new credit card may be an opportunity to improve your bad credit. Thus, the relevant bank or lender will see that you can make monthly payments on a regular basis. This will increase your credit score. And sometimes, all you need to do is just to wait. When you focus on your payments, you will find that your bad credit has improve over time.

Didem Sagindik
is a Sr. Research Analyst at Financhaser, focusing on Loans. She has PhD on Business Management.

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