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Online loans save a lot of people from their most pressing expenses. Such loans provide advantages to borrowers that they can’t get from conventional loans. Say, for example, the fast and no-hassle loan application when borrowing money from online lenders. It means you won’t need to sweat out going to a physical lending office and falling in line for several minutes or even hours.
Unlike banks and credit unions, online lending companies are more accommodating to borrowers with poor credit. It’s possible to get these loans even if you have bad credit so long as you receive a regular monthly income.
Today, there are various types of online loans that borrowers with not-so-good credit scores can avail of. Read on below to know more about these bad credit online loans.
Payday Loans
Online payday loans became popular most probably because of their critics. These critics say that these loans come with exorbitant interest rates, causing people to get trapped in long debt cycles.
For honesty’s sake, there are indeed online lenders that conduct their business unethically. For example, charging too much interest on poor borrowers and even scamming some of them. However, not all payday loan providers are of the same mold. Others do their business with honesty and credibility.
An increasing number of borrowers even resort to taking payday loans because of the advantages they provide them. For those who want to borrow money, online payday loans are extremely accessible. You won’t even need to worry about having bad credit because payday lenders may still approve your application so long as you have the means to pay them.
Moreover, you can now avail of secure online payday loans thanks to laws implemented by state regulatory bodies. Lenders of these loans are prohibited from charging more than the 36% interest rate limit. Also, the loan amount you may borrow should be no more than $1,000 to make it easier for you to pay back the loan.
Online Personal Loans
Do you need to pay off your debts? Or does your car need a repair? Consider taking out an online personal loan!
One great advantage of this loan is that the repayment comes in monthly installments. It means that it will be easier for you to budget your repayment every month. Compared to payday loans, personal loans come with more affordable rates. But you need to know beforehand about additional fees for the loan.
And, yes, some online lending companies that provide personal loans are not strict about credit requirements. The keyword there, however, is ‘some’, which means not all of them accommodate borrowers with bad credit. So, if you have a poor credit score, your job is to find a lender that offers bad credit personal loans.
Peer-to-Peer Loans
Probably, you have seen ads about peer-to-peer loans while searching for ways to borrow money online. Yes, P2P loans are quite popular today because of their accessibility and affordability.
The P2P borrowing process can be summed up like this: you take a loan from someone who’s a member of a peer-to-peer network and pay back what you owe plus interest through that network. One good thing about this borrowing scheme is that the lender has the freedom to set lenient credit requirements so that people with bad credit can avail of the loans. Of course, they can also set affordable interest rates anytime.
Guarantor Loans
Many folks with bad credit feel hopeless when borrowing money because of their financial situation. Thanks to guarantor loans they may now avail of loans even if they have poor credit scores.
As its name suggests, you have to look for a guarantor before you can borrow money through this loan. The individual that you choose as a guarantor must have good credit for you to qualify for the money you need to borrow.
Looking for an individual to be your guarantor for the loan isn’t that easy. That’s perhaps the disadvantage of this loan. The guarantor has to pay your debt if ever you default on it, and it’s hard to convince anyone to do that. It’s recommended to go to your family members and friends and ask them if they want to be your guarantor.
Cash Advances
Borrowing money with bad credit is also possible through cash advances. Credit card companies provide this kind of loan, and one advantage of this is that the money you’ll borrow can be used for any expenses. There’s also a repayment plan to ensure that you can pay back the money on time and avoid defaulting on your loan.
Takeaway
If you find yourself needing to borrow money with bad credit, don’t feel hopeless. Many online lending companies now offer loans that are intended for folks with not-so-good credit scores. You can search for loans on the internet, such as online payday loans, online personal loans, peer-to-peer loans, guarantor loans, and cash advances.
