A final thing to watch out for is the transparency of the lender and the quality of customer service. For this list, we at NextAdvisor ruled out lenders who did not make essential information easily accessible. A lender that is transparent about basic information does not guarantee they’ll be transparent about everything. And a lender that hides important information or appears misleading is never a good sign.
Getting a sense of the quality of customer service before you sign with a lender can also be helpful. The lending and repayment process can be long and complicated, and working with a lender that’s helpful when issues arise can save you a lot of headache in the long run. You can check out customer reviews and complaints – as well as how the company responded to them – on consumer review websites like the Better Business Bureau (BBB).
Frequently Asked Questions About Bad-Credit Loans
If you want to increase your credit score to better your chances of getting a loan, here are some ways to do it:
- Pay your bills on time. Payment history accounts for 35% of your FICO credit score, so the best way to increase your credit score is to pay your bills on time and in full every month.
- Check your credit report for errors. You can check your credit report for free from the three major credit reporting agencies – Equifax, Experian, and TransUnion – every year. Report any errors to the credit bureau responsible so that your credit score isn’t harmed by inaccurate information.
- Don’t close old credit cards, even if you’ve paid them off. The average age of your credit history accounts for 15% of your FICO credit score. Even if you don’t intend on using a card regularly, it’s best to keep it open, especially if the card is your oldest card.
- Avoid opening too many new cards at once. Recent activity accounts for 10% of your credit score, so you’ll get dinged if you open – payday loan centers in North Jackson or even apply for – too many credit cards and loans at once.
What is an unsecured personal loan?
With a secured loan, you put down an asset – such as a house or a car – as collateral, and the lender can seize that asset if you don’t make your payments. An unsecured loan does not require putting down collateral. Unsecured loans are considered riskier for the lender, and because of this, unsecured loans will typically have higher interest rates, lower loan amounts, and stricter credit requirements than secured loans.
Even if you don’t have assets on the line, defaulting on an unsecured loan still has serious consequences. It will seriously damage your credit score, and lenders may take legal action against you.
How much can I borrow?
The amount you can borrow will depend on the lender you choose and your credit application. The loan amount offered by the lenders we included here range from $1,000 to $50,000. In general, the higher your credit score, the larger the loan amount you’re likely to be approved for. The APR you pay on the loan will also vary depending on the loan amount. Larger loan amounts will also typically have longer loan terms.
Can you get a small loan with bad credit?
Having bad credit will make it harder for you to get a loan, but it is possible. All the lenders we included on our list have minimum FICO credit score requirements in the “fair” range, which includes scores from 580 – 669. Keep in mind that the lower your credit score, the higher your APR will likely be. Be wary of payday loans or other predatory lenders who may offer loans to those with poor credit at the cost of extremely high APRs and fees.