The 5 safest loans for bad credit

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Many people have bad credit for several reasons. These include late payments, delinquent loans, too frequent credit card applications, or filing for bankruptcy. If you have bad credit, it’s easy to get approved for short-term options like payday loans, pawn loans, car title loans, or personal installment loans.

Even people who have bad credit have options for taking out personal loans. For example, if your credit score is 579 or lower, unsecured loans can provide you with quick funding for unexpected expenses. When taking out a personal loan, find out about lenders’ transparent terms, prices and borrowing limits, calculate what you’ll pay in interest, how quickly you’ll have to repay borrowed funds and how quickly you can guarantee the loan.

1. Upgrade

According to personal finance experts like Forbes Finance and Investopedia, Upgrade paves the way for low-credit consumers to secure a reliable personal loan.

The upgrade has a score of 4.3 out of 5 possible points. One of its best features is an automatic payment discount that lowers the interest rate from 5.94% to 35.97% APR.

Minimum credit score:

550

Time to receive a loan:

Same day financing for approved borrowers

Borrowing limits:

$1,000 to $50,000

Advantages

  • Allows low credit scores (550)
  • Allows co-applicants
  • Reduced rates offered to eligible co-applicants
  • Easy online application process
  • A pre-qualification that doesn’t hurt your credit score
  • Long maximum repayment terms
  • The lender is available anywhere in the United States

The upgrade lets you borrow as little as $1,000 with a credit score as low as 550, and you can get a lower rate if you apply with a co-applicant and receive loan approval. Plus, the online application process is simple and you can pre-qualify without hurting your credit.

The inconvenients

  • Setup fees can vary from 2.9% to 8.0%
  • Must have excellent credit, enable autopay, and set up direct payments on any existing debt balance to get the lowest APR available
  • Zero rollover options

2. Rocket Loans

If your goal is to get a quick loan to cover a personal crisis, Rocket Loans scores a 4.2 on some finance gurus’ best personal loans for poor credit lists. With same-day financing up to $45,000 after approval and an APR of 6.72% to 29.99% with automatic payment discount, Rocket Loans lives up to its reputation for light speed.

Remember that Rocket Loans will need to verify your information and give your bank time to process the funds before you can get your hands on any money.

Minimum credit score:

580

Estimated time to receive a loan:

Next Day Funding

Borrowing limits:

$2,000-$45,0000

Advantages

  • Offers consumer loans with low credit ratings (580)
  • Same day funding if you are approved
  • Wide range of loans

The inconvenients

  • 1% to 6% setup fee
  • Rigid conditions that only offer two options for 36 or 60 months
  • No co-signers or co-applicants allowed
  • Credit score requirement of 580 may weed out some applicants with lower scores
  • No same day financing option
  • Relatively low maximum loan amount of $35,000
  • Relatively high range for ARP
  • 4.75% initial administration fee

3. Before

Before can be a good option if you want consolidate debt with this lender. Avant allows you to consolidate all your loans into a single monthly payment. This is useful if you have trouble keeping up or paying multiple separate loan installments on time. Rated 4.1 by Investopedia for low credit consumers, Avant also offers an APR of 9.95% to 35.99% on personal loans.

Minimum credit score:

580

Estimated time to receive a loan:

Financing from 1 to 2 days

Borrowing limits:

$2,000-$35,0000

4. Loan point

If low fees are important to you, check out LendingPoint. With a score of 4.1, this lender charges a 6% origination fee deducted from your overall loan amount, but tends to offer lower fees than other lenders. You can expect a standard range of 9.99% to 35.99% APR. If approved, you should receive the loan funds within one day.

Minimum credit score:

600

Estimated time to receive a loan:

One day

Borrowing limits:

$2,000 to $35,000

Advantages

  • Average setup fee of 3.5%
  • Fewer costs
  • One day financing
  • Accepts low credit scores (580)
  • Offers pre-qualification choices
  • No prepayment penalty

The inconvenients

  • Relatively high fixed APR of 21.99%
  • No co-signers or co-borrowers allowed

5. Simple and fast loans

If your credit falls below the 550 to 600 base requirements for some of these loans listed, don’t despair. Simple Quick Loans offers several loan options for eligible borrowers, even those with very low credit scores. They also offer flexible repayment options and a simple application process. Just be ready with your ID.

Minimum credit score:

All scores are welcome

Estimated time to receive a loan:

At the end of the next banking day

Borrowing limits:

$200 to $3,000

Advantages

  • No penalty for prepayment of the loan
  • Pre-qualification available
  • No warranty

The inconvenients

  • No approval without current account

How to get approved for a personal loan with a low credit score

If you have bad credit, it may restrict your access to safe loans with better terms and lower APR rates. On the other hand, you have a better chance of being approved if you apply with a co-applicant with excellent credit and a good payment history. You can also use autopay and dedicate any additional income to paying down current debt.

Here are 3 best ways to tell if you qualify when applying for a personal loan with low credit.

  • Your recent credit history demonstrates that you have resolved your past credit issues. When lenders look at your credit score, they’re more likely to approve you if your recent history indicates you’ve worked to resolve issues such as delinquent loans, tax liens, or pending bankruptcies. The main objective of the lender is to ensure that any old debt problem will not prevent you from repaying a new loan that they grant.
  • Your income is high and secure enough to repay the loan. Before approving you for a personal loan, most lenders need to know that you have the resources to pay it back. A lender determines this by looking at your debt-to-income ratio. This checks how much debt you owe against how much income you earn. If the ratio is too far off, a lender might not approve you because they view the imbalance as a repayment risk.
  • Taking out a loan will improve your financial future. Ask yourself if taking out a loan will help you reach your financial goals and help you reach a secure situation. For example, you could take out a single fixed rate loan with a lower interest rate to pay off a debt with higher interest rates. The last thing you want to do is continue to borrow and get stuck in insurmountable debt.

How to apply for a personal loan with a low credit score

  • Complete an application with the requested information. Most lenders have applications you can submit online in minutes. It’s a great way to check if you’re prequalified without hurting your credit score.
  • Choose a lender that offers same-day or next-day financing if you need fast financing.
  • Examine the lender to make sure it has a good reputation with both government sources, such as the Consumer Complaint Database of the Consumer Financial Protection Bureau.
  • Check loan offers on favorable terms to see if the lender’s offer matches your needs and situation.
  • Then agree to the terms and submit any documentation required by the lender.
  • Once the approval process is complete, you can create an online account to receive the funding once it is processed.

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