Having a poor credit score isn’t something any of us will ever want. There are many setbacks in this situation, and one of them is represented by the challenges when filling for a loan.
Bad credit means lesser loan options to choose from, but also much higher interest rates, which in the end translate in a greater amount of money paid to the lender.
But how to choose the best bad credit lender if you find yourself in this situation? The good part is that, with thorough research, you can find the lender which fits your loan needs.
First of all, you have to acknowledge what bad credit is. A poor credit score is anything under 580, but a “bad credit” may include also under 600-630, or the low end of the “fair credit score”. The options that you have at this point are quite limited, especially because big banks will require a decent credit score to begin with.
After this, you need to check and find out what is the exact credit score that you have. This may be higher or lower than you actually think, and the sooner you know it, the sooner you get to check with all the lenders on the market.
Then, is important to know which companies are happy to deal with this kind of financial situation. One example is a big company like OneMain Financial, which has more than 15 million customers. The personal loan company works in 44 of the 50 states and has a total of 1,600 branches nationwide. It has a history of more than a century and is widely regarded as one of the best bad credit loan companies, especially for emergency funding, as it provides last-minute fast approved loans. Click here for a complete One Main Financial review.
Other financial institutions have the same approach with regard to bad credit loans. Some are good for building credit, some offer secured or unsecured loans, some are fast funding or have flexible repayment options, some are the best in case of limited credit history, or the best for the really bad credit and some have the best mobile app. There are also lenders that are the most appropriate for personal loans, auto loans, refinance loans, or private student loans, all regarding the bad credit. You can choose the lending company based on these factors too, upon research.
The loan companies which lend to people with bad credit take into consideration not just the credit score and credit history, but also may require other documentation to look at other factors. And this is something the big banks or companies won’t do.
Knowing how much you can afford to loan is the next step. Having bad credit and a not-so-great income means you will have to think of a lower amount of money. That is because you will face higher than average interest rates, and other taxes. In these cases, coming up with a bigger down payment – or the biggest you can afford – will eventually help a lot in the long run. Also, some lenders may charge less for down payments greater than 10% – in case of the mortgage loans.
Just before deciding on the lender to go to, you may want to visit a credit union, because it may offer a lower rate than of the big names in the market, and also personalized service. A federal credit union offers maximum APRs which are considerably smaller than the big names in the business.
The bottom line, very careful research will help you make the most out of a bad credit situation when considering a loan. Good research means looking not only at the market and the lenders but also at what you can afford and which is your current status.
