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The 5 safest loans for bad credit 

Many people have bad credit for several reasons. These include late payments, defaulted loans, applying for credit cards too often, or filing for bankruptcy. If you have bad credit, it’s easy to get approved for short-term options such as payday loans, pawnshop 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 give you fast funding for unexpected expenses. When you’re taking out a personal loan, investigate lenders’ transparent terms, prices, and borrowing limits, calculate what you will pay in interest, how soon you need to repay borrowed funds, and how fast you can secure the loan.

1. Upgrade

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

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

Minimum credit score:

550

Time to receive a loan:

Same-day funding for approved borrowers

Borrowing limits:

$1,000-$50000

Pros

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

Upgrade allows you to borrow as little as $1,000 with a credit score as low as 550, and you may get a lower rate if you apply with a co-applicant and receive loan approval. In addition, the online application process is easy, and you can pre-qualify without hurting your credit.

Cons 

  • Origination fees can range from 2.9% – 8.0%
  • Must have excellent credit, enable autopay, and set up direct payments on any existing debt balances to obtain the lowest APR available
  • Zero refinancing options

2. Rocket Loans

If your goal is to secure a quick loan to cover a personal crisis, Rocket Loans scores a 4.2 on some finance guru’s top personal loans for poor credit lists. With same-day funding up to $45,000 upon approval and 6.72%-29.99% APR with an Autopay Discount, Rocket Loans lives up to its light-speed reputation.

Remember that Rocket Loans will need to verify your info and give your bank time to process the funds before you can lay your hands on any cash.

Minimum credit score:

580

Estimated time to receive a loan:

Next day funding

Borrowing limits:

$2,000-$45,0000

Pros

  • Offers loans to consumers with low credit scores (580)
  • Same day funding if you’re approved
  • Broad loan range

Cons

  • 1%-6% origination fee
  • Rigid terms that only offer two options for 36 or 60 months
  • No co-signers or joint applicants permitted
  • 580 credit score requirement may eliminate some applicants with lower scores
  • No same-day funding option
  • Relatively low $35,000 maximum loan amount
  • Relatively high range for ARP
  • Initial 4.75% administration fee

3. Avant

Avant can be a good option if you want to consolidate debt with this loan lender. Avant allows you to consolidate all your loans into one monthly payment. This is helpful if you struggle to keep track of or pay multiple separate loan payments on time. Rated 4.1 by Investopedia for low-credit consumers, Avant also offers 9.95%-35.99% APR on personal loans.

Minimum credit score:

580

Estimated time to receive a loan:

1–2-day funding

Borrowing limits:

$2,000-$35,0000

4. LendingPoint

If low fees are important to you, head over to LendingPoint. Scoring at 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%-35.99% APR. If approved, you should receive loan funds within one day.

Minimum credit score:

600

Estimated time to receive a loan:

One day

Borrowing limits:

$2,000-$35,000

Pros

  • Average low 3.5% origination fee
  • Fewer fees
  • One-day funding
  • Accepts low credit scores (580)
  • Offers pre-qualification choices
  • Zero prepayment penalty

Cons

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

5. Simple Fast Loans

If your credit falls below the 550 – 600 baseline requirements for some of these loans listed, don’t despair. Simple Fast Loans has several lending 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 proof of ID.

Minimum credit score:

All scores welcome

Estimated time to receive a loan:

By the end of the next banking day

Borrowing limits:

$200-$3,000

Pros 

  • No penalties for paying off the loan early
  • Pre-qualification available
  • No collateral

Cons

  • No approval without a checking account

How to Get Approved for a Personal Loan with a Low Credit Score

If you have bad credit, this can restrict your access to safe loans with better terms and lower APR rates. On the other hand, you’re more likely to get approved if you apply with a joint applicant with excellent credit and good payment history. You can also use auto-pay and throw any extra income towards paying off current debt.

Here are 3 top ways to indicate if you’re eligible when you apply for a personal loan with low credit.

  • Your recent credit history demonstrates that you have resolved your past credit issues. When lenders review your credit score, they are more likely to approve you if your recent history indicates that you worked to fix any problems like delinquent loans, tax liens, or current bankruptcies. The lender’s primary goal is to ensure that any old debt issues won’t prevent you from repaying a new loan that they issue.
  • 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 reviewing 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. Consider if taking out a loan will help you achieve your financial goals and help you achieve a secure situation. For instance, you might take out a single fixed-rate loan with a lower interest rate to pay off debt with higher interest rates. The last thing you want to do is to keep borrowing and mire yourself in insurmountable debt.

How to Apply for a Personal Loan with a Low Credit Score

  • Fill out an application with the requested information. Most lenders have applications that you can submit online within minutes. It’s a great way to check if you pre-qualify without damaging your credit score.
  • Opt for a lender that offers same-day or next-day loan funding if you need fast funding.
  • Review the lender to ensure that they have a good reputation from both government sources, such as the Consumer Financial Protection Bureau’s Consumer Complaint Database
  • Check for soft loan offers to see if the lender’s offer fits your needs and situation.
  • Next, accept the terms and submit any documentation the lender requires.
  • Once the approval process is complete, you can set up an online account to receive funding once it is processed.
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About the author: Access Publishing

Scott Brennan is the publisher of this newspaper and founder of Access Publishing. Connect with him on Paso Robles Daily News on Google, Twitter, LinkedIn, or follow his blog.