Poor credit can either imply that you have a bad credit history or you have a lower credit score. Whether it is a question of a bad history or a poor score, most lenders especially the common lenders such as the banks are bound to overlook and reject your applications however often you bring them or keep at it. Your history might have been built the wrong way, or you just didn’t do enough to help yourself from this situation. Besides, an outstanding credit score is one of the most important factors which lenders use to determine your creditworthiness. If you have a poor score; you make it easy for the lenders to make a decline since you make a high-risk case. A good history serves to alleviate the risk you carry when borrowing. With good credit, you can qualify for loans, including payday loan.
Therefore, it has to be understood that searching for a loan with bad credit is almost an impossible task since all odds are against you. However, you can find lenders who specialize in the kind of loans where you as the consumer do not really need to have a good history to stand approved for a loan. So, to answer the question; yes, you can get an installment loan with poor credit. Below are some of the alternative options on the type of financing you can undertake and be guaranteed a loan amidst poor credit scores.
Installment loans and uses
These are the kinds of financing where you make scheduled deposits in loan repayment over the loan period – 1 month to 30 years. Installment loans are broad in that it can be used to refer to personal or commercial financing they include, auto loans, mortgages, etc. one common factor about these loans is that they have a fixed interest rate, except for a mortgage which has varying rates according to the market trends. Also, other than property loans such as mortgages, all other personal loans are unsecured, meaning they are not collateralized. Therefore, you can use installment loans just about anything ranging from domestic, business, repairs, medical, cash supplement, motor and house purchases, loan consolidation, etc.
How you can be able to choose a good installment loan
Comparing interest rates; you will want to save yourself from the burden of having to pay large loan amounts in the future. That is the reason you should always be on the lookout for a lender with the least loan rates. Other than alleviating your payment situation, it helps your security of mind and hence you can easily budget with this expense in the account. Online loan lenders usually show you the rates chargeable without necessarily having to pull a hard credit score inquiry which sets back your points by some margin.
Review offers from the lenders; exploring the different parks offered by the lender helps you choose the most appropriate and affordable installment loan. For instance, if the lender is offering flexible payment plans without extra charges, some offer the ability to renegotiate the loan term in case their financial position is shaken by the unknown, maybe floods or economic difficulties. These are some of the offers that might help you to choose a helping and progressive financing. Engage with the lender to see which offer is in store in case you were to sign up.
Merits and demerits of bad credit loans
You must exercise caution while studying and shopping for these loans. To ensure you are not cyber attacked, or be spied on, you need to know your lender, the location of the business, the market rating, etc.
Speed: most of the loans provided online are personal loans. It takes a considerably short time to process these loans. So, if you were in an emergency, you would find a way out in a few hours of application. Say you have a hospital bill to pay, before that bill hikes and becomes overly alarming, you would have made the deposit in such a short time.
Lower rates in comparison to credit card financing: bad credit loans are often convenient and economical with credit rates compared to credit cards. Therefore, you can settle for this type of financing and leave out the expensive expense in credit cards.
Term of the loan: depending on the situation you are in and the person applying for the loan, you can vary the repayment period to suit you. Either because of financial difficulty, or you have just increased your income and would like to repay in advance, according to the lender’s initial contractual terms, you can maneuver through and end up not getting extra charges on the loan.
Serves to improve your credit index margin: remaining committed to repayment dates, would help improve your credit scores. Since these loans involve small dollar amounts, you can easily pay off the lender in time to maintain or improve your score.
Charges and penalties: bad credit loans should ideally be without extra fees. But some lenders apply fees to some specific loans. So, before you take out that loan, read through the regulations and terms to see if there are any fees of origination, processing, late payment penalties or check deposit fees.
Some require securities: some loans usually require you to give collateral. A good example is a mortgage. So that in case you are unable to pay the loan in time you will automatically lose your house.
Illegitimate lenders: a legitimate lender is one who is licensed to work under the laws of a particular state. If your bad luck leads you to a lender who is not genuine, then you risk a loss. Therefore, ensure your lender is a registered one and licensed to operate in your country or state to open a business with them.
The Bottom Line
Installment loans as discussed are loans that have a definite repayment scheme and are given for a wide range of uses. These loans can be given for commercial or private/personal use. Just like other loans, while shopping for installment loans, check on the lender license and most importantly the rates chargeable and general terms of the loan. It has been clearly shown that the loans you qualify for with bad credit are limited, hence limited lenders. However, most of the loans offered online are installment loans.