If you need cash, a personal loan could be just what you need to help pay your bills. Many people who need fast money overlook the option of personal loans because they do not understand how they work. However, they don’t think they will be able to qualify for one of these loans because they have a less than impressive credit score.
However, the truth is that you can find personal loans even if you have a very low credit score of less than 600 or even 550. There are several types of personal loans to choose from, including secured loans, unsecured loans, and car title loans. . .
Secured loans are those where you put up some type of collateral, something of monetary value that the lender could easily sell if you default on the loan principal. Because this type of loan is secured, it means you can expect to pay slightly lower interest rates. Also, your credit score won’t be a big factor with these loans, since the fact that you’re putting up collateral helps reduce the lender’s risk in the deal.
Unsecured loans, on the other hand, do not require you to offer any collateral to the lender. That’s good if you don’t want to put up something of value for a possible sale by the lender later. However, the drawback is that you will have to pay a higher interest rate on the money you borrow.
Meanwhile, a car title loan is very similar to a secured loan. In fact, it is a form of secured loan. With a car title loan, you are using the equity in your car as collateral for the loan. In the case of this type of loan, you risk losing your car. And, the interest rates can be quite high.
If you can, your best bet among these 3 options is to opt for an unsecured loan. Surprisingly, even if you have a bad credit score, you should be able to find a bad credit lender to lend you the money you need.
The trick to doing it is this: you don’t want to walk through the front door of any old personal loan lender and apply for a loan. Rather, you’ll want to do your homework first. Find a notepad and a pen. Then, start looking for personal loan lenders who work hard to deal directly with people with low FICO credit scores. Take good notes so you know who to call and who offers you the best deals.
You see, bad credit personal loan lenders won’t be as obsessed with your credit score as most lenders would be. While most lenders will run screaming at the sight of a FICO score below 550, a bad credit personal loan lender will automatically see it as a challenge to try to meet or exceed. By applying directly with them, you will be setting your wheels in motion, with the goal of finding a way to get you approved.
Final bonus tip: Make sure you’re not limited to applying to just one of these lenders. Instead, apply to at least 3-4 of them. That will increase your chances of getting the best rate.