4 Best Loans for Bad Credit Scores
You have a bad credit score, and no way to get rid of it, unless you count taking out a loan. Fortunately, there are several best loans for bad credit that you can lean on.
But with your bad credit, do you even qualify for a personal loan?
How do Loans for Bad Credit Work?
With credit scores, though, you might think it very low, your credit might only be less-than-perfect. Nevertheless, when borrowing money, it’s much better to do your research so you know where you’ll be able to get the best bad credit loans from.
Across the board, all experts agree that Avant offers the best personal loan to people with bad credit.
You can receive an amount up to about $35,000 and can start from an interest rate as low as 9.95%. With no penalty for late repayment and a small administrative fee that’s taken directly out of your initial loan amount, Avant is a comparatively better service for those who may need a smaller loan. In addition, Avant has a repayment term of about 24–60 months.
However, for those who need a greater loan amount with lower interest rates, any of the following might better suit their needs.
Need a lender who can offer up to $40,000 in loans? LendingClub is right up your alley.
A peer-to-peer marketplace for lending that matches investors with borrowers; LendingClub has no prepayment penalties, a soft credit inquiry and a maximum loan amount that surpasses Avant. In addition, with LendingClub, you can apply for a loan with a credit score as low as 600.
But with LendingClub, you may need to wait for 4 days before you receive the loan amount. Also, if you live in a U.S. territory or Iowa, you may not be eligible for a loan from the company. In addition, origination fees will be taken directly from your loan amount, with a late fee of 5% added to it if you’re 15 days late in making your payment.
If you feel like you’re efficient enough to carry this process out through the repayment period (36 – 60 months), then LendingClub would be a good choice.
This is an ideal choice if you’ve applied for bankruptcy in the past!
Given that it can be difficult to file for a loan after declaring bankruptcy, LendingPoint makes your problems easier by offering loans up to $25,000 with interest rates starting at 9.99%. The only caveat is that your bankruptcy will need to have been discharged for about 12 months.
LendingPoint has no prepayment penalty either, and accepts credit scores as low as 585. Also, bankruptcy isn’t a deal killer either so you will be able to get some money from the company. And though this amount will be a lot less than what Avant or LendingClub offers, it will still be better than nothing.
Your qualifications for a loan will need to satisfy the annual income requirement of $20,000 however. If you can’t prove that, you might be out of luck. In addition, due to some restrictions, you may not be able to receive a loan from LendingPoint if you live in the state of West Virginia.
Choice#4: OneMain Financial
Do you like to conduct your business face-to-face?
OneMain Financial is the lender to go to. With about 1,600 branches in up to 44 states, OneMain Financial offers personal loans up to $20,000. Interest rates reach to about 18%. The amount can be repaid over term lengths, ranging from 24 to 60 months.
You can contact any branch if you have questions about your loan options, and you’ll be able to meet the lenders as well when you pick up your loan in person. With no repayment penalty and a soft credit pull, OneMain Financial is a reliable company if you’re worried about your loans.
But be warned, the origination and late fees will be added as an addition to your interest costs, which are already high to start with. In addition, the company will take your credit history, debts, incomes, and other collateral into consideration during the application process. So, be ready to open up your complete financial history.
Taking Care of Loose Ends
Student loan repayment (on time) can improve your credit score, thereby letting you take out a better, bigger loan. To help pay off the student loan faster, you can utilize the ‘REPAYE’ option, which lets you pay off the loans as you earn. You can use this repaye calculator to help you calibrate your finances for this undertaking. In addition, for your regular spending needs, here are the best credit cards for people with bad credit, and the best credit cards for college students.
The Bottom Line: The Best Loans for Bad Credit Scores
It might seem like you have no other choices for improving your bad credit. But the truth is that it only takes a bit of research and some good ol’ fashioned hard work to find the best lender for a loan!
Just be sure to hire a legal professional if finances are not your strong suit, and find a trusted lender.
Check reviews and ask for recommendations if need be.
In addition, be open about your situation with your lender. With the correct information at hand, they will be able to help you come up with an effective loan plan that would benefit you and the company at the same time!