Applying for a personal loan if you have bad credit is similar to what’s required for any other type of loan, including:
- Filling out an application: The first step you’ll need to complete is to submit a loan application that includes personally identifiable information. This includes such things as your name, Social Security Number, and birthdate, items needed by the lender to verify your identity. Plus, you’ll share why you need the loan, how much you want to borrow, and paydayloansohio.net hours any other information that’s required (e.g., your annual or monthly income).
- Review loan offers: Once you’ve submitted some basic information, many lenders will pull a soft credit check that doesn’t hurt your credit score to see if you qualify for a loan. (However, some don’t offer the option to pre-qualify with a soft credit check.) They’ll also provide you with information about the rates and terms you might receive if you decide to proceed. Carefully review the offer to ensure it fits your needs.
- Accept the terms and provide required documentation: If the offer is acceptable, then the next step is to accept the terms and formally apply for the loan. During this stage, the lender will pull a hard credit inquiry that will affect your credit score. Plus, it will evaluate your income and other items to make sure you qualify for the loan. You may be required to submit additional documentation, like bank statements and pay stubs during this phase of the application process.
- Receive funding and set up an online account: If your loan is formally approved, the lender will disburse the funds to you in the manner you specified in your application. This could be sending them electronically to your bank account, writing you a check, or distributing the funds directly to your creditors to pay off existing debt. You’ll also need to set up an online account with the lender so you can manage your loan.
What Are Bad Credit Loans?
Bad credit loans are financing options offered to individuals with low credit scores of 669 or less. Although there are many types of bad credit loans, the most common is an unsecured personal loan. Unsecured personal loans for bad credit often carry monthly repayment terms of no more than two to seven years with a fixed interest rate. Plus, this type of bad credit loan is quick to get, as many lenders offer next-day funding.
Is It Easy to Get a Personal Loan with Bad Credit?
It could be relatively easy to get a personal loan if you have bad credit, so long as you can afford the payment and you’re not currently delinquent on your existing debt. However, if you have active credit issues, like delinquent loans or unpaid tax bills, then you’ll need to work on getting these problems fixed before you apply for a personal loan. There are many places you can go to get help resolving credit issues, such as credit counseling.
What Are the Types of Loans for Bad Credit?
Before choosing a loan for bad credit, it’s essential to understand the types of loans you might be able to get, what it takes to qualify, and how much it will cost you. Just because you have bad credit doesn’t mean you can’t get funding. Make sure to look for a lender with transparent pricing and with reasonable repayment terms that allow you to pay off the balance in no more than five to seven years. The types of available loans for bad credit vary based upon why you need the money, just like any other loan. Some of the most common types of loans for bad credit include: