When you have bad credit, your loan options can become limited. In fact, you may feel like you don’t have any options at all. So what do you do if you need some extra cash, but don’t have enough savings or any room left on your credit cards?
One option you might be looking for is a bad credit loan with guaranteed approval. However, according to the FTC: “Legitimate lenders never “guarantee” or say that you are likely to get a loan or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy.”
So, we want to be clear that the lenders below do not offer “guaranteed approval”, but they do specialize in lending to people with bad credit. These loans definitely come at a cost. While these are not payday loans, they still come with high interest rates and short repayment periods.
While we can not guarantee approval, we can refer you to some lenders that are more likely to lend to people with bad credit history. Keep reading to find out more about bad credit personal loans and what other financing choices may be available to you.
Bad Credit Loans – Almost Guaranteed Approval
If you’re looking for personal installment loans, there are a few go-to options to consider. Check out these online lenders offering fast approvals, oftentimes with minimal qualifications required and no credit checks.
MoneyMutual doesn’t guarantee a loan, but all types of credit are welcome and it’s free to find a lender. If you’ve had a bankruptcy or other serious credit issues, it’s still possible to be approved.
They offer short-term loans of up to $2,500 in as little as one business day after your application’s been accepted.
They’ve served over two million customers to date. There’s no cost to fill out the online application, and it takes just minutes.
For online loans between $500 and $10,000, CashUSA has fairly basic qualification requirements.
Here’s what you’ll need.
The biggest hurdle you’ll need to meet is a monthly after-tax income of at least $1,000. There are a few smaller requirements you’ll need, such as a checking account in your name, a valid email address, and a valid phone number. Your credit scores aren’t affected by the application process and isn’t used as an eligibility factor.
Once you submit your online application, CashUSA acts as a matching service by searching its lender network for your personalized loan offers. Because they work with multiple direct lenders, interest rates and fees can really vary greatly. The APR range is between 5.99% and 35.99%. Loan terms may be as short as three months or as long as five years.
Getting a short-term loan through CashUSA is fast. Not only can you get approved within minutes, you can also receive your funds within a day.
BadCreditLoans.com is another online service that matches you up with direct lenders that don’t require a credit check. It’s possible to be approved for a loan amount up to $5,000 but if you have poor credit, the limit is usually $1,000. Repayment terms range between 3 and 36 months.
Your credit rating isn’t used as a huge approval factor. However, you will need consistent income, which can come from full-time employment, self-employment, Social Security, or even disability payments. You’ll also need a bank account, both home and work phone numbers, and your own email address.
They advertise “pressure-free” online loans. That means that once you receive a loan offer, you’re under no obligation to actually take it. You have time to carefully review the loan terms to determine whether or not it’s a good fit.
Since it’s a short-term loan, you may also save money on interest over time compared to longer loans. It really depends on what kind of terms you’re approved for. There are also a number of loan types available, so you could very well financing for whatever type of need you have.
PersonalLoans.com also specializes in bad credit loans. They offer larger loan amounts with longer repayment terms. Loans start at $1,000 and go up to $35,000. For repayment, you’ll have anywhere between 90 days and 72 months (six years).
Rather than being a direct lender, PersonalLoans.com works with a network of lenders. Interest rates are between 5.99% and 35.99% depending on your credit, so be sure to check your loan offer carefully.
To qualify, you’ll need consistent income, which oftentimes must be verified through a paystub. There’s no specific credit score minimum but you do need to demonstrate recent financial responsibility.
What exactly does that mean?
First, none of your accounts should be more than 60 days late. Second, you shouldn’t have a pattern of late payments. Your existing debt should be manageable with your income and finally, you shouldn’t have accounts that have been recently charged off.
In addition to installment loans, PersonalLoans.com also partners with peer-to-peer lenders. These types of loans require a minimum credit score of 600 and at least $2,000 a month in income.
NetCredit offers loans up to $10,000. Your credit history won’t be impacted by checking your eligibility. What can you expect as far as interest rate and terms?
Your interest rate actually depends on where you live because each state has different laws regarding how much lenders can lend and charge as interest. In Virginia, for example, your APR could be as high as 155%. In Washington state, on the other hand, you won’t pay more than 35.99%.
Unlike many personal loans online, NetCredit is usually the direct lender and servicer of your loan. In some states, the company does partner with Republic Bank & Trust Company. There aren’t any loan application fees or prepayment penalties with NetCredit, but you may have to pay an origination fee in some states.
If you want to rebuild your credit history while repaying your personal loan, know that NetCredit does report your payments to both Experian and TransUnion.
Another unique perk from NetCredit?
You don’t have to worry about borrower’s remorse. That’s because you have a window of opportunity that allows you to return your loan funds by the next day if you change your mind for some reason.
Bad Credit Personal Loans – Are they really guaranteed?
These loans offer near-automatic approval without even performing a credit check on the applicant.
So if you have poor credit and need financing, you could likely get approved for a guaranteed installment loan for bad credit. Depending on the lender, however, you may need to meet other requirements to qualify for a loan.
For example, many bad credit lenders require you to have a bank account. This may be either to deposit the loan funds into or to ensure automatic payments on the due date (similar to payday loans).
Other lenders may require a certain level of monthly income, as well as consistent employment for a certain amount of time. Even if a loan is advertised as “guaranteed” because there are no hard credit checks, it doesn’t mean you’ll automatically qualify without meeting other eligibility requirements.
There are certainly many “predatory” payday loan lenders out there. However, there are also legitimate lenders that will work with borrowers of all credit types. Some lenders also report your positive payment history to the credit bureaus. That can help you rebuild your credit over time.
How to Avoid a Cycle of Debt
When considering an installment loan, or any type of financing for that matter, it’s important to keep your own financial health in mind.
Most lenders are typically tasked with evaluating whether or not a borrower has the ability to repay. If not, the loan shouldn’t be approved. But lenders’ formulas for approval don’t necessarily take into account all of your financial responsibilities.
That means you need to look at the numbers and make sure that you can truly afford the loan amount you borrow. Check to see what kind of fees (if any) you’ll need to pay, plus how much the principal and interest will cost you each month.
Many people get in trouble when their budgets are too tight after taking out a personal loan. If you’re not able to contribute to a savings account and a financial emergency hits, you may have to redirect your loan payments to something else. You’re then saddled with tons of fees and a credit score that just drops lower and lower.
You can see why it’s important to really take a look at your finances as they are today before taking on any other burdens. Assess what you need the loan funds for and how necessary that is in the grand scheme of your other financial goals.
We know that cash can be tight and short-term loans can help lighten the load. But it’s also vital that you think about how to sustain your finances in the long run so that you avoid getting caught in a never-ending cycle of debt.
Other Types of Financing for Poor Credit Borrowers
Installment loans are certainly an option if you need a lump sum of cash. But take a look at a few other forms of financing as well.
It’s always best to educate yourself on different types of products and ways to access money so you know which one works best for your specific situation. Here are a few ideas to get the wheels turning.
Online Unsecured Loans
Yes, you’ll likely need at least a soft credit check (and sometimes a hard one) to get an online unsecured loan, but there are some lenders that still lend to borrowers with below-average credit.
There are a couple of perks that come with these loans. While your interest rates will still be high, they’re less likely to be in the triple-digit range that is often associated with payday loans.
Also, you may be able to get a longer loan term. This can make your monthly payments much more manageable to help you avoid that debt trap. Just be sure to compare the total cost of the loans over time.
Yes, you may pay less month to month, but if a loan is stretched out over several years, you may end up paying more interest over that period. If it loosens your budget to be able to have more flexibility on a regular basis, however, it may be worth it to you.
Payday loans are costly, short-term loans that you typically have to repay with your next paycheck. With a payday loan, you can usually only borrow somewhere between $300 and $1,000 depending on your state’s law. Overall, there are many cheaper alternatives to payday loans and we highly recommend that you avoid them altogether.
Cash Advance from Your Credit Card
If you need to pay for something that doesn’t allow for a credit card, but still have room on your line of credit, you may be able to get a cash advance. Since you already have the card, you don’t have to worry about applying for a new one, which also preserves your credit score.
Oftentimes, you’ll have to pay a slightly higher APR on cash advances but if you have plans to repay it in the short-term, you may be able to save compared to high-interest loans.
No matter what type of credit score you have, it’s very likely that you can find a financing option out there. If you choose a personal loan with guaranteed approval and no credit check, make sure the rates and terms are truly worth the purpose of the loan.