When you have bad credit, your loan options can become limited. In fact, you may feel like you don’t have any options at all. So what do you do if you need some extra cash, but don’t have enough savings or any room left on your credit cards?
Bad Credit Loans – Guaranteed Approval
If you’re looking for personal installment loans, there are a few go-to options to consider. Check out these online lenders offering fast approvals, oftentimes with minimal qualifications required and no credit check.
How to Avoid a Cycle of Debt
When considering an installment loans for bad credit, or any type of financing for that matter, it’s important to keep your own financial health in mind.
Most lenders are typically tasked with evaluating whether or not a borrower has the ability to repay. If not, the loan shouldn’t be approved. But lenders’ formulas for approval don’t necessarily take into account all of your financial responsibilities.
That means you need to look at the numbers and make sure that you can truly afford the amount you borrow. Check to see what kind of fees (if any) you’ll need to pay, plus how much the principal and interest will cost you each month.
Many people get in trouble when their budgets are too tight after taking out a personal loan. If you’re not able to contribute to a savings account and a financial emergency hits, you may have to redirect your loan payments to something else. You’re then saddled with tons of fees and a credit score that just drops lower and lower.
You can see why it’s important to really take a look at your finances as they are today before taking on any other burdens. Assess what you need the loan funds for and how necessary that is in the grand scheme of your other financial goals.
We know that cash can be tight and a loan can help lighten the load in the short-term. But it’s also vital that you think about how to sustain your finances in the long run so that you avoid getting caught in a never-ending cycle of debt.
Other Types of Financing for Poor Credit Borrowers
Installment loans are certainly an option if you need a lump sum of cash. But take a look at a few other forms of financing as well.
It’s always best to educate yourself on different types of products and ways to access money so you know which one works best for your specific situation. Here are a few ideas to get the wheels turning.
Online Unsecured Loans
Yes, you’ll likely need a credit check to get a loans for bad credit but there are some lenders that still lend to borrowers with below-average credit.
There are a couple of perks that come with these loans. While your interest rates will still be high, they’re less likely to be in the triple-digit range that is often associated with payday loans and some guaranteed loans.
Also, you may be able to get a longer loan term. This can make your monthly payments much more manageable to help you avoid that debt trap. Just be sure to compare the total cost of the loans over time.
Yes, you may pay less month to month, but if a loan is stretched out over several years, you may end up paying more interest over that period. If it loosens your budget to be able to have more flexibility on a regular basis, however, it may be worth it to you.
Cash Advance from Your Credit Card
If you need to pay for something that doesn’t allow for a credit card, but still have room on your line of credit, you may be able to get a loans for bad credit. Since you already have the card, you don’t have to worry about applying for a new one, which also preserves your credit score.
Oftentimes, you’ll have to pay a slightly higher APR on cash advances but if you have plans to repay it in the short-term, you may be able to save compared to high-interest loans.
No matter what type of credit score you have, it’s very likely that you can find a financing option out there. If you choose a personal loan with guaranteed approval and no credit check, make sure the rates and terms are truly worth the purpose of the loan.
Compare loans for bad credit at finance.co.uk