If you have bad credit, you may think you can’t get a loan, whether it’s to buy a home, buy a car, go to school or whatever else you may need the funds for. The truth is, though, loans for poor credit are definitely possible. Yes, you may have to pay a higher interest rate at the outside, but if you make your payments on time a high-interest loan can actually be just the catalyst you need to start rebuilding good credit. Your payments (and the fact that you successfully paid off the loan) will be reflected on your credit history, rebuilding your credit and making it easier to get loans in the future.
There are a lot of lenders out there who will offer credit to those with bad credit. Here are a few tips to find the right lender and loan for you if you are in this situation.
Steer clear of payday loans. These loans may seem like a convenient and easy way to get some fast money, but you’ll end up paying crazy-high interest rates – up to 200 percent or even more. It’s never worth the money to pay a company that kind of interest, especially on a loan you’ll only have for a few days.
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Read the application very carefully. It may seem tedious (and it is) but you never want to sign any loan documents without first reading the fine print carefully. Not all loan companies are above board, and there are some shady ones who are only too eager to prey on those with poor credit, as they know they are more desperate to get a loan and may be more willing to overlook some questionable stipulations in the contract. Reputable companies, on the other hand, will be there to help you, not swindle you. Ask lots of questions and take note of how they answer. If your gut is telling you that something isn’t right, you should probably listen. Your instinct is rarely wrong.
Before you get a loan, go online and to some investigating. Although of course you can’t trust everything you read online, if there are lots of negative reviews of a particular lender, red flags should probably go up. If you see lots of glowing reviews about how helpful the staff is, how patient they were, etc. that should be a good sign. In either case, however, proceed with a measure of caution and use your own best judgement.
Getting a bad credit loan is definitely possible, but don’t be so eager to get a loan that you are willing to sign on the first dotted line that is put before you. Find a company that will lend you the funds at a reasonable interest rate (although, as already stated, be prepared to pay more than you would if you had good credit) and find a lender you feel you can trust.