Finding a loan that matches your requirements when you need money fast can be both a stressful and arduous experience. The stress and difficulty of researching different loan options is only amplified when you have bad credit and need money quickly.
There are a variety of reasons why you might need to research different loan options. For example, you might need to pay off unexpected medical bills, deal with house repairs, pay a mechanic to fix your car, or cover childcare expenses.
Whatever type of situation you find yourself in, it is fundamentally more difficult to pay the bills you need to when you have bad credit.
With this in mind, there are still plenty of accessible loan options when you have bad credit and need money. Nearly a third of all Americans have bad credit, so it makes sense that there are plenty of loan options available for those with erratic financial history.
Read the tips below to find the best loan options available to you when you need money but have bad credit.
Title loans are one of the best loan options when you need money quickly but have bad credit. Although there are small differences when it comes to loan terms depending on the state you live in, title loans are generally very easy to obtain.
General Title Loan Requirements
- Be the owner of the title of your vehicle
- Proof of monthly income
- A government issued ID
- Personal references
Once you have these requirements, you can simply contact a title loan company, have your car appraised, sign a contract, and walk out with the money you need. The average title loan is worth roughly $1,000, which will surely be able to help you pay off any unexpected financial burdens.
The best part of a title loan is that bad credit may not affect your loan in any way, shape, or form. The title of your car acts as collateral so credit is not heavily looked at.
Many people assume that a personal loan is not an option when you need money and have bad credit. Unlike a title loan, the amount of interest you must pay is directly related to your credit score. If you have bad credit, the interest rate will be higher.
While a high interest rate is not ideal, bad credit will not completely stop you from getting a personal loan when you need money.
Bad credit, which is classified as a credit score below 600, may not prevent you from getting a personal loan, but it will prevent you from getting a personal loan from certain lenders.
Unfortunately, national and community banks tend to avoid granting approval to individuals with bad credit. However, credit unions oftentimes have less strict policies when it comes to giving out a loan to those with bad credit who need money. Additionally, many credit unions will even offer relatively favorable interest rates to those with bad credit.
Online lenders also give out personal loans to people with bad credit. Unlike certain credit unions, however, these loans will tend to have higher interest rates.
Among the different types of loan options available to those with bad credit, credit cards are likely the most common.
The difference between a personal loan and a credit card is relatively simple. A personal loan is a fixed debt, meaning you receive a fixed amount of money and repay a fixed amount every month.
A credit card, on the other hand, is a type of revolving debt. That is, there is a set limit that you can spend every month, but it is up to you to pay off the balance at the end of the month. If you do not pay off the balance, then you will pay interest on the debt while still having the ability to make new purchases.
For people with bad credit, credit cards are one of the best loan options because it is relatively easy to qualify for a new line of credit. Luckily, there are plenty of credit cards available for people with bad credit who need money.
General Financial Rules of Thumb for Those with Bad Credit
It is important to remember to pay attention to the terms and agreements of any loans, especially the interest rate and payment terms. Doing your homework in this respect can potentially save you money, reduce your stress, and ultimately improve your credit over time!
Looking for loan options can be daunting, especially when you need money quickly and have bad credit. However, with the loan options described above, you will be sure to find the money you need without too much hassle.