You need a loan, yet you find yourself dreading the application process because you know what the lender will find in your credit report. Rather than putting your life on hold while you try to repair your credit, you can look for a bad credit loan. As long as you’re realistic about what you can expect during the lending process, finding a loan to meet your financial needs shouldn’t be a difficult task.
Bad Credit Loan Turnaround Time
When you apply for a bad credit loan, you can expect the underwriting process to take several days to a few weeks. Although your favorite lender may advertise same-day financing, this is often something lenders reserve for borrowers with perfect credit. Because your credit score places you in the high-risk borrower category, make sure you apply for personal loans well in advance of when you need the money. This will allow the lender adequate time to review your information and request additional documentation if they need it.
Bad Credit Loan Interest Rates
It’s no secret that borrowers with shaky credit receive higher interest rates than lending companies advertise for qualified borrowers. Before you apply for a bad credit loan, determine the maximum payment you can afford. When your credit is less than perfect, it’s wise to avoid dwelling on the interest rate, when affordability is often the critical factor for you. As your credit improves, you can look into low interest refinance options for your personal loans.
Keep in mind that legal loan maximums still apply to you when you take out a bad credit loan. Reviewing the interest rate ceiling for your state will help you determine if the offered rate is too high. Just because your credit isn’t perfect is no reason to fall victim to illegal loans.
Bad Credit Loan Repayment Terms
A bad credit loan may not offer as long to repay as the standard loan does. This is because lower credit scores equate higher risk to the lender. The longer it takes you to repay the full loan amount, the more risk you’ll default on your obligations. Again, determining your maximum monthly payment amount before you apply for personal loans will help. As long as your payment is affordable, it won’t matter to you whether you have five years or three years to repay the balance.
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