Bad credit loans are for people with bad credit or even no credit.  Once your score drops

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below a 650 you should start looking at bad credit lenders. Many of the mainstream lenders like Bank of America, like to see clients with credit scores of 680 or above. Applying at mainstream banks can prove to be very frustrating and for some a waste of time.

A Closer Look at Bad credit loans

As their names suggest, these credit programs are extended to consumers suffering from fair or poor credit. That way, they can easily gain access to funds, which they can eventually use for a wide-range of purposes, depending on their personal or household financial requirements. For instance, you can use the proceeds of your loan to finance a medical emergency, cover the expenses involved in a home renovation or remodeling project, and even settle some of your outstanding debts.

There are a lot of bad credit lenders you can approach to get bad credit loans. When the economy started to go down and many people who used to have good credit found themselves with a foreclosure on their credit report. Many finance companies started to offer financing for people with a low credit score. You just need to do your research because some of them charge outrageous fees and rates.


Why work with an online lender:

What’s great about dealing with online lenders is that you can possibly receive instant approval on your application for a loan. In fact, by simply filling out an online for and hitting the submit button, you can immediately receive a decision from the credit firm. And in a matter of days – at times, hours; you can get your hands on the funds you need, via electronic money transfer.


Loan Features to Look for

While looking  for bad credit personal loans, we suggest you look for the following features:

  • An affordable interest rate. Although bad credit programs, in general, carry steep rates of interest, it is still possible to find one that comes with a reasonable rate. To succeed in this endeavor, we suggest you take the time to consider the prevailing rates in the market and use it in evaluating the offers you will soon receive.

Tip: And don’t hesitate to negotiate for the rate you want. After all, the finance company may be willing to grant your request.  Have a copy of your credit report handy and if you make sure you have an explanation for anything negative.  Make them understand that although you have a low credit score, your circumstances have changed and here are the reasons why they should give you a better rate or higher loan amount.

  • A short repayment term: Most bad credit loans have a short repayment term.  Usually 36 – 48  months.  Sometimes a lot shorter just depends on the type of loan you are getting and dollar amount.  If you find a bank that will give you a longer term, evaluate the interest rate you are paying.  It’s usually better to pay off these loans as soon as possible.  Evaluate how much you can afford to pay monthly and choose the shortest term you can take and still make the monthly payments without a lot of financial stress.
  • How much do you need to borrow?  Always remember that a majority of bad credit lenders are only willing to extend small loans to people with bad credit.  This is especially true for people with no credit.  Recently we had someone apply for one of our secured business loans but they had NO CREDIT, he was 40+ years old and had a BAD ATTITUDE. He came into the office with a bad attitude and yelled when we told him its great that he is debt free, but since he had no credit history and nothing to give us as collateral, we didn’t feel comfortable lending him $40,000.  If you need a large loan and have bad or no credit, you may be asked for additional collateral or a co-signer.
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Read the lenders loan criteria before applying

Don’t apply for loans that you have no hope of being approved for. Before you apply make sure you know:

  • What is the minimum credit score
  • If you have a fairly light credit profile, find out how many tradelines they require and the length of time you need to have had credit
  • Do they require a security deposit
  • Will they accept additional collateral (such as a paid off car) as additional collateral

Some Last Minute Tips

  • Research your lenders.  Examine their track record in terms of dealing with bad credit consumers. A quick google search will tell you a lot about a lender.  All the lenders on this site have been researched and we have done business with them for years.  But if they are not listed here, PLEASE take the time to research them before giving them your personal information.
  • Read the terms and conditions of your contract.  Keep in mind, anything they tell you needs to be in writing.  If they promise you one rate over the phone and then you get the paperwork and buried in the fine print is a disclaimer stating the rate is an introductory rate.  You need to have it in writing that they offered you the rate for the life of your loan.
  • Use the proceeds of your bad credit loan responsibly.  Bad credit loans tend to have higher interest rates than regular loans.  They are meant to be used for emergencies such as fixing/replacing your car, hospital bills etc.  They really shouldn’t be used to finance fancy vacations
  • Keep up with your monthly repayments.   When you have bad credit its best to try to improve your credit.  These loans can help you with that, but you MUST make sure you make your payments on time.  And if you can, pay extra.  Make it a priory to pay off the loan as soon as possible, while building a good tradeline for your credit report.