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If you have a credit score in the low range, then you probably know a thing or two about applying and then getting turned down for loans. The fact that you get turned down so often could also make it much more difficult for you to improve your existing credit because you’re not getting the chance to show lenders that you’re trying to turn your finances around. Because of this, you may have no choice but to suffer the consequences and take out bad credit installment loans. The one good thing about getting a loan with bad credit via this method is that many lenders offering installment loans will report your timely payments to the credit bureaus, which means that you’ll be improving your score over time.

Types of Loans for Bad Credit

There are a few different types of loans you can take out with bad credit. One of the most popular options are credit cards geared toward people who are trying to improve their credit. These types of credit cards are secured — meaning that you’ll have to pay a deposit before you can get the card in the event you don’t pay. However, when you make your payments, they will be reported to the credit bureaus so your score should gradually improve. Bad credit installment loans are another option, and you can get these through several different private lenders. The interest rates will be high, but likely much lower than what you can expect from your third option: payday loans. Getting a loan with bad credit by taking out payday loans should definitely be a last resort because the interest you’ll be charged will likely be higher than what you’ll see anywhere else, and also the industry is shady in general. The FDIC states that payday loans are actually one of the highest risk types of subprime loans available today. Many payday lenders are very untrustworthy and looking for nothing more than to rip you off.

Car Loans For Bad Credit

Having a bad credit score does not necessarily mean you can’t get a car loan. What it does mean is that you may be able to get a loan, but your chances of getting a low interest rate and low monthly payment with that loan are fairly slim. But if you need a car badly enough, you’ll be happy to deal with those consequences for the time being as long as the end result is that you have something to drive. Here are a few tips to help you understand how to get a car loan with bad credit:

Hit Dealerships When They Have Lots of Cars to Unload

About once a year — sometimes more often — major car dealerships will have large shipments of newer model cars coming in. This means that they desperately need to get rid of the older cars to make room for the new stuff. When this happens, dealerships are much more desperate to get your business and may relax their rules on credit. You’ll know when this is happening by watching their advertisements. Sometimes you’ll even see ads in your local paper for incredible deals with no money down and no credit check. You may need to read between the lines a little because these deals are often too good to be true, but you still stand a better chance at getting a car during these times than you do at others.

Set Your Sights Low

According to MSN Money, the number one reason why most Americans are broke may have a lot to do with how much they pay for vehicles. The average American spends well over $8,000 per year just on car payments! If your credit is already bad, you don’t want to make it worse by getting a vehicle you cannot really afford and then end up having to go through with an auto loan modification just to get yourself caught back up when you fall behind. Try to set your sights on less expensive older model vehicles when you go car shopping. A vehicle like this may not be what you want, but it should get you from point A to point B — at least until your credit is in better shape. Once you have better credit, you can try to trade up for something you really want rather than something that just serves the purpose of getting you around.

Try to Have Some Money Down

A key step in learning how to get a car loan with bad credit is understanding that you need to put at least some money down. Having a down payment won’t necessarily guarantee you’ll get a car loan, but it will up your chances slightly. The more money you have for a down payment, the more likely you may be to get loan approval.

Look For Dealerships That Cater to People With Bad Credit

There are plenty of privately owned car dealers that specialize in bad credit car loans. Under normal circumstances, it would be best to avoid places like this because they’re known for selling cars of questionable quality at inflated prices with unbelievably high interest rates attached to them. This is why doing business with a place like this should be a last resort for you. Seek out bad credit car dealers only if you have explored all other avenues for getting a vehicle with no luck. It’s also a good idea to check out all the private car dealerships you’re considering with the Better Business Bureau to make sure they check out and haven’t ever seriously ripped anyone off. If the car dealership you want to use is in your local community, try asking people you know that have done business with them in the past what their experiences were like.

Long Term Loans For Bad Credit

Although it’s not always the case, many with people with bad credit also have problems with cash flow. This means that making regular high dollar payments on various loans might be difficult to do, and obviously this can make a bad credit score even worse. Taking out long term loans for bad credit is something that you might have considered doing because short-term loans generally come with higher, less affordable monthly payments. On the outside, a long-term loan seems like a better idea because the longer the loan is drawn out, the lower the payments can be. In spite of this benefit, it’s important to look at the big picture before taking out such a loan.

Disadvantages of Long Term Loans

If you need to take out a $5000 personal installment loan, your lender might let you decide how long you want to pay on it. On paper, your payments are going to be much higher every month if you opt for the shorter duration, and your payments will go down if you let the loan drag out for five or even six years. You may be tempted to take the long term option because the payments will be more manageable, but what you’re not thinking about is that the longer you’re paying this money back, the more money you’re giving up in interest. In fact, there’s a good chance that by the time you’ve paid the loan off in it’s entirety, you’ll have paid that $5000 you borrowed back two times over. Who wants to do that? It also won’t be any fun to know that you’re going to have that annoying monthly payment hanging over your head for the next five to six years. Even if your payment is very low, chances are excellent that you’re still going to get incredibly sick of trying to remember to pay it every single month for that long.

Advantages of Long Term Loans

In spite of the fact that you will almost definitely be giving up more in interest than you want to, getting a loan term loan could make it easier for you to make your payments for a while if you really do need the money. Making a $50 payment every month on a $4000 personal loan with bad credit will most definitely be much easier for you to manage than making a $200 payment every month. However, you shouldn’t lose sight of the fact that you’re paying a lot in interest. Once your financial situation improves, it might not be a bad idea to either start seriously paying down on the loan by putting something extra on the principal with each payment or talk to your lender about refinancing for a shorter duration of time.

Other Important Information

Which Bad Credit Loan Should You Choose?

The type of loan you decide to take out should depend primarily on how much money you need and just how bad your credit score is. If you need a substantial amount of money, like for example a $2500 loan with bad credit, you may be best off to check into bad credit installment loans. Companies offering these tend to be willing to loan out more money, but keep in mind that if your credit is incredibly bad, you may not be able to get approval. If you only need a small amount of money, a credit card might be your best bet. You can either attempt to get a secured one or an unsecured one. The interest rate will be high, but if you pay it off as soon as possible, it will look good on your credit. You can then close out the account and try to get a credit card with a more favorable interest rate. Payday loans are also an option for you if you only need a little bit of money. However, you may not be able to get one depending on where you live because many states have banned them — and with good reason. If you decide to go the payday loan route, be 100 percent certain of what you’re getting into and try to make sure that you have the money to pay the loan back when it comes due so that you don’t have to turn around and borrow more money from the payday lending company. You should avoid getting sucked into the vicious payday loan cycle at all costs.

Experiencing a budget shortage is a very normal experience that each family goes through at some time in their lives. Some have very ingenious ways of coming up with money – and that is through the internet. Some people even end up in Project Payday online or any other site that could help them generate income. Others take advantage of online loans. However, is it possible to get a loan through the internet given that you have a bad credit score and that you need it fast? Lucky for you, some online lenders do offer some unsecured loans for bad credit – instant decision style!

Instant decision loans are very popular on the local scene because it is convenient to take out and you don’t have to go through the hassle of credit checks or providing collateral to have leverage over that loan. In spite of the known costs of these loans, many still find it so comforting especially when you are in dire need of cash.

The main reason why instant decision loans are so patronized by many is because you will know in an instant if you are eligible to get a loan. Usually, the pattern that unsecured instant decision loans follow is that of a payday loan. Some even have the tag line “instant decision payday loans” to their ads. Now, these lenders have eligibility criteria that are also very common to payday loans so it would be easy for them to determine if you are qualified to get a loan and the process wouldn’t take you long.

On another thought, even if it sounds too good to be true, there are still disadvantages that these online unsecured loans have. One is that it may cost too much because they usually have high interest rates and surcharge, or the fee that you will pay even before you have the loaned money on hand.

Another thing is that you will be disclosing very personal information to people that you do not have any formal contact with. This is a high-risk loan that you should make not based on desperation but on critical thinking. You might experience being robbed of your identity if you get involved with an illegitimate lending source.

So what should you do to know that you have selected a legit lender and that they can give you the best deal of a loan? First, assess your credit score. Is it too bad? Would it tempt others to take advantage of your situation and give you a loan that has a sky-rocketing interest rate? Can you do something to make it better?

Next, choose only those lenders that are not too flowery. Most of the time, when a lender’s site is too sugar-coated, it might mean that they may have very bad service. Choose only those that are factual enough to tell you that “this may take you 1 hour” or that “these are high-risk loans”.

Finally, these lenders do not require collateral so they should cost more expensive than regular loans. If you see a lender that offers too-good-to-be-true interest rates (too low for the standard rate), then it is very possible that they have hidden charges or very high surcharges with their loans.

You can also ask for any recommendations from your friends if they have tried getting an online unsecured bad credit instant decision loans.

Remember, all of us suffer financial loss at times so it’s really normal to have debts once in a while as long as you keep track in paying them.

Have you tried getting an unsecured bad credit unsecured loan over the internet? If you have any relevant experience then you can get that off your chest by leaving a piece of advice, suggestion, or comment on the comment box below.