It is always a hustle to get affordable loans with bad credit but that does not mean that it is impossible. Your bad credit may stop you from getting a great APR, but you will still get interest rates that are way lower than payday loans.
There are many online lenders that may be able to help you get a loan when you have poor credit. However, because you have a credit score of 580 or below these lenders will charge you higher interests rates than people who have good or excellent credit.
Personal Loan For Bad Credit
Lenders consider your credit score, credit report and debt to income ratio when you are applying for an unsecured personal loan. Therefor it might be very difficult for you to get this type of loan if you have bad credit. Qualifying for an unsecured personal loan may also mean that you will have to pay a bit high interest rates for the loan.
A personal loan for bad credit is often paid in monthly installments and can be used for anything. This however does not mean you have to borrow money to buy something that does not make any financial sense.
How To Know Your Credit Range?
There are a few agencies that offer you a credit score. The most popular credit scores are FICO scores and are often available for free if you get them from your credit card company or bank. These FICO credit score ranges are as follows:
- Excellent: Range between 800 and above
- Very good: Range between 740-799
- Good: Range between 670-739
- Fair: Range between 580-669
- Poor: range between 579 and below
Getting A Bad Credit Loan
Check your credit: The first step when you are looking to get a loan with bad credit is to get your free credit reports. When you have gotten your credit report you have to make sure that you verify that there are no errors that can cause your credit scores to be low.
Pay down debt: I will advise you to pay down your credit card debt balances to 30% or less of your available credit limit. If When you do this it could help your credit scores as well as your debt-to-income (DTI) ratio.
Consider a co-signer: When you find out that you cannot be approved on your own, applying with somebody else who has better credit than you can also help you get approved for the loan.
Lenders may find that the co-signers’ credit score and additional income are sufficient to help you qualify.