Now, What Do I Need to Qualify for Bad Credit Loans?
Of course, you need to understand your requirements when applying for bad credit loans. Usually, lenders will not ask you for collateral but will just assess your credit score to determine whether they should lend you and how much they should. Since scores are rated from 300 to 850, they usually classify anything below 650 as bad credit. Two things may happen if you fall at the bottom of this food-chain: they will either deny you the loan, or if it's your lucky day, you'll get unfavorable terms.
As previously said, you have to reach the maturity age to apply for bad credit loans. You should also be a registered resident of the United States and be employed at the moment. This simply implies that your consistent income will provide a means of payment. You also need to have a checking account for your bad credit loans to be approved.
These are the minimum requirements of most lenders. But what if they still deny your personal loans for bad credit?
Why Would They Still Deny Me in Bad Credit Loans?
Different lenders will have diverse terms, and thus, we can't give you a definite answer for that. That notwithstanding, it is important to ensure your bank account is active for your bad credit loans to be approved. Once you have met all the conditions mentioned above, clarify with the lender whether they have any additional requirements. If you can't meet the terms and are in real need of personal loans for bad credit, move on to another lender, and you might just come by one with better terms.
Other basic reasons may include a high debt-to-income ratio, poor credit scores, and probably a pending loan. They cannot give you two bad credit loans at a time without clearing the one that's pending. They might also neglect to give you one altogether if you have other loans elsewhere. Deliberate on a debt consolidation loan if you find debt to be the issue.
How Much Does a Bad Credit Loan Cost Exactly?
That is simply one of those questions which also totally rely on the lender you land on. Nonetheless, we will give you a short layout from a majority of the bad credit loans lenders and their inclusive charges.
There is the usual fee, which may also vary depending on your financial institution. Should it come to payment time and the check bounces due to insufficient funds in your account, your banker will also add extra charges to paid by you. Moreover, should you decide to make a late payment, you will receive a penalty for that and extra fees in case you want to roll-over your installment loans for bad credit.
Do you still want to take a bad credit loan? Consider the following fees indicating the annual percentage rate, which should help you determine the lender with the best terms:
| Finance Fees |
APR |
| $15-35 fee on $100 short term personal loans |
390%-851% |
| $33 fee if the $100 payment has a bounced check |
860% |
| $37 fee in case the $100 credit card balance receives late payment |
965% |
| $21-46 fee to reconnect for $100 utility bill |
520%-1175% |
| NB: These typical charges may vary from lender to another, and some may even have extra fees. |
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And What If Im Unable to Repay Bad Credit Loans?
We wish we had good news for you. This is where the slope gets slippery. You will first start receiving calls as the lender makes all the desperate attempts to breakdown the withdrawals from your account into smaller and smaller chunks. Each failed attempt results in more charges for you, and eventually, you may end up paying double on the fees over the amount you borrowed.
When these methods prove unsuccessful, they will now use their lawyers to write you letters. If that doesn't shake you, now they will try to reach out to your family or whomever you listed as personal references. It gets serious from here since they've started using 3rd parties.
If the bad credit loans aren't paid after all these threats, the lender might try to negotiate with you to make partial payments while using debt collectors. This could end up in a civil lawsuit against you, and if they succeed, they could eventually cease your assets or have your wages garnished. What's more, the lawsuit will stay in place for the proceeding 7 years for the public to be warned. Are you ready to go through all these with bad credit loans? You might think your home loans for bad credit came in handy at the time it did, but are you completely sure you'll be able to repay at the short time duration given?
Well, until now, it might seem as if all hope was lost. Not so! There are plenty of other options you just havent taken time to consider.
What Are My Alternatives to Bad Credit Loans?
We won't even mention bank loans to you since clearly, that's out of the question. But the following methods will go a long way to assist you not only in the short run and emergencies but also in the long run.
A. Advance in Paycheck
Start by checking whether your state allows your employer to issue you an advance from your paycheck when you find yourself in a tight spot. Consult the HR department or your supervisor to see if this is a possibility. Alternatively, if you have the guts and are in good rapport with your employer, you can approach them for a soft loan.
B. Credit Union
Whether you want home loans for bad credit or simply to take a loan for your problems, credit unions will always be the best option for you if you are a member. You just can't pass by their attractive and friendly interest rates and minimum requirements.
C. Debt Settlement
Even though this will hurt your credit score, you may end up clearing your debt with a fresh start.
D. Addressing the Roots
Are you managing your expenses correctly? Are there any expenses you need to cut out? All the means stated above only address the stem and the branches, but why do you keep on ending up in debt? Why is your paycheck never enough?
These are crucial questions to ask oneself. A self-analysis might help you fix the problem permanently. It might even encourage you to try credit counseling, which aims at seeing you develop your budgets and work towards saving.
E. Extras
Consider those bills that aren't 'necessary.' You can skip out on paying them. If utterly necessary, use your credit card, which will lead you into a spendthrift mode. When it comes down to it, don't be too proud to ask for help from family and friends.
What Should I Not Do?
You might be tempted to look for alternatives to bad credit loans and find yourself in a deeper ditch. The following are the options you should not even consider due to the trouble it might lead you into.
Auto Title Loans: they simply ask for the title of your car in exchange for the debt. We dont need to explain what happens should you fail to meet your obligations, do we?
Long-Term Pay Day Installment Loans: like other bad loans, they don't necessarily need you to have a good credit score. They are also available both online and at storefronts. They can increase the debt-period to up to 3 years, but installment loans for bad credit have interest rates that are nothing but ludicrous.
Now youre better armed. We hope you are enlightened about the different options you have in case you land yourself in trouble. But you know what they say about trouble: you shouldnt dare troubling it before trouble troubles you!
