There are many reasons why you may need a loan. When applying for one, a common requirement that lenders have is that you ought to have a good credit score. But what happens when you have a bad credit score and still need a loan? Whether you need the money for an emergency or to settle some debts, you might need to look around to find the best options if you have a bad loan. There are options available to people who have a bad credit score and these are the options we will look at in this article.
Although not impossible, it is much harder to get a personal loan if you have bad credit. But, if you look hard enough, you will find lenders and financial institutions who are willing to give you the loan. The caveat though is that the loan will be attached to some conditions you may not like. For example, you will only have the option of taking a small-term loan – a smaller amount than what you need – and have to contend with higher-than-average interest rates.
The second option is payday loans. These are short-term loans that let you borrow a small amount, usually $500 to $1000, and that need to be repaid at the end of the month. They are called payday loans because they need to be paid on your payday, otherwise you might have to pay a higher interest rate than you anticipated. Payday loans are to be avoided if you are not sure you will be able to repay the borrowed amount at the end of the month. That said, they are excellent short-term loan options for those who can repay.
Car Title Loans
Car title loans are another common option for people who need a loan but have a hard time finding a lender because of a low credit score. Car title loans are secured loans that let you borrow against your car’s title. Lenders who offer good car title loans Provo will often do a valuation to see how much your car is worth which lets them calculate how much they can lend you. They will also check your documents to ensure you are the car’s owner or have some equity in the car.
You can expect to have the money sent to you in as little as 24 hours after everything is verified which is a huge benefit should you consider these loans.
Home Equity Loans
Home equity loans are similar to car title loans in that they are secured loans offered against the value of an asset you own. Home equity loans, just like payday loans, should be avoided unless you can repay the loan in time or do not have any other option. It is very easy to lose your home if you default on your payments.
Home equity loans are a good option when you need a sizable amount of money, which makes them very common among people who want a huge infusion of cash into their businesses but have a poor credit score. It might seem like there are no good loan options when you have a bad credit score, but that is not entirely true. It is possible to get a good loan – all you have to do is look hard enough.