Personal Loans Bad Credit: First Check Rates
Yes, it is possible to find personal loans for bad credit.
Use Bills.com Personal Loan Rate table to find a loan for borrowers with bad credit. Enter your zip code, the loan purpose and the loan amount. Then click on the “continue” button to get a real-time offer from a Bad Credit Lender.
What is a Bad Credit Personal Loan?
Maybe you thought that lenders only offer personal loans to people with excellent credit? After all, a personal loan is based on your financial situation and capability to repay the loan. Why would a lender want to offer a loan to someone with bad credit?
While lenders offer loans with the best rates to people with excellent credit, they also offer loans at higher rates to borrowers with bad credit. While there are different credit rating scales, here is one that the Personal Rate Table uses:
To keep tabs of your credit, it is important to check your credit reports periodically and make sure that all of the reported items are accurate. Any negative account is going to hurt your credit and make it more difficult to qualify for a personal loan.
Why Take a Personal Loan for Bad Credit?
The most common reasons to take a personal loan are debt consolidation, pay for medical bills, make big purchases, or cover emergencies.
Probably, the best reason to take a bad credit personal loan is to cover emergencies. While the best strategy is to save money in an emergency fund, anyone can run into a situation where they need money quickly and don’t have liquid assets available. What should you do if you need money to pay for medical bills to allow further treatment? Or you need to fix your auto so that you can get to work? .The high rate is justified if it helps you get the required medical treatment or saves your job.
Debt consolidation is a common reason to take a personal loan. However, if you have bad credit, then the interest rates might be too high to make it a good alternative. Before you take a personal loan make sure that you can afford the monthly payments and you are reducing your interest.
Should You Consider a Bad Credit Personal Loan?
A personal loan for bad credit doesn't sound like a great idea. After all, if you have bad credit, then you must be facing some financial hardship, and you can't afford to make payments.
Maybe your bad credit was due to temporary problems, or old items that are still on your credit report. If you now have a steady income, a balanced budget, and a good financial plan, then the loan might help put you back on your feet.
However, If you are in serious financial hardship and cannot afford the monthly payments, then consider other options.
Before you take out a bad credit personal loan, consider all of your alternatives. Then shop around and compare lenders and rates.
Find Bad Credit Personal Loan Lenders
Not all lenders offer loans to people with bad credit. Comparison shopping is the key to getting the best deal available. Get pre-approved, and if a lender rejects your application, then ask them why. If you keep hearing the same answer, it gives you an idea of steps you need to take to improve your chances of getting your application approved. Personal loans for bad credit have higher interest rates. However, interest rates can vary widely from lender to lender. The difference in interest rates you may be offered can be gigantic. A higher interest rate means a higher payment on a loan for the same amount with the same number of payments.
The lenders who offer loans to borrowers with bad credit specialize in this area. You may be less familiar with the names of the lenders, which is another reason to do your homework on any lender you may use and to comparison shop.
Here is an example of terms using three lenders. All of them offer personal loans to bad credit borrowers. If you borrow $10,000 and to repay the loan in 36 monthly payments, here are the total cost and monthly cost. The interest rate shown is not the highest each company charges but serves as a good comparison.
- OneMain Financial 36 months, 22.74% APR, $385.75 monthly, $13,887
- Avant 36 months, 26.99%, $408, 14,688
- NetCredit 36 months, 94.5% APR, 842.50, $30,330
(Note: The interest rate and payment numbers are within the range offered by the three companies, but are presented for illustrative purposes and not real offers).
In general, the higher the rate loans are intended to help pay for a significant and urgent emergency. Make sure you can afford the monthly payment. Lenders look at your ability to make timely monthly payments. However, it is possible to be approved for a loan that makes it hard to pay all your other bills.
Most definitely, yes! When evaluating the loan offer you need to take into consideration the interest rate, origination fee, and the length of the loan.
Use Bills.com's APR Calculator to check different scenarios and your monthly payments.
One common type of bad credit personal loan is a payday loan. That is a good alternative only if you can afford to pay off the loan immediately. They are short-term bridge loans to pay for an emergency. Payday loans are not intended to be rolled over and add to an already existing debt problem.
If you have collateral, then consider taking a secured loan. You could use a vehicle (title loan), a house (cash-out refinance or home equity loan), or a deposit as a secured personal loan.
If you are struggling with finances, then you need to look for other debt relief alternatives such as debt consolidation, credit counseling, debt settlement or bankruptcy. Check out Bills.com Debt Payoff Calculator to find a solution that best meets your needs.
While many legitimate lenders are offering bad credit personal loans, there are also a lot of scammers out there trying to rip-off money from people who can least afford it.
The scammers know that someone looking for a loan at a high-interest rate could be desperate for a loan. The two biggest signs of a personal loan scam are:
- False promises. They try to lure you by using language like “guaranteed approval,” and “no one is turned down.” No lender is going to lend to everyone. Avoid any lender that makes this claim.
- Advance Fees- Never pay a fee in advance for a loan. Most legitimate loans charge a fee and may take that fee out of the loan amount at the time they release it to you. That is far different than paying a fee before the money is given to you. Whether it is called an application fee, a processing fee or something else, take this as a warning to cease working with this firm.