There are several types of bad credit loans. The more popular forms include the personal, mortgage and car loans. As the term suggests, bad credit loans are called as such because they are approved without looking at your payment history.
Although some banks offer bad credit loans, one popular place where you can find them is via the Internet. Because of their popularity, competition is tough and that is good news for you as competition drives interest rates down while encouraging better guidelines too.
Regardless of the type of bad credit loan you choose, two things would remain the same: they require no credit check and they come with shorter terms compared to the services offered in traditional lenders like banks.
Personal loans are more commonly referred to as payday advances. These are bad credit loans that come in smaller amounts but must be paid back in your next payday. Otherwise, a new term would roll-over and you would need to pay a whole new set of fees and interest.
Another term for mortgages is housing loans. For the longest time, banks have been handling housing loans because they are usually big loans. However, when banks started to impose stricter regulations, fewer families were able to afford the mortgages offered. So to answer a rising need, online lenders created bad credit loans that specifically work for housing.
Since mortgages are of huge value, they are usually split into installments usually lasting for more than a year. You have to be able to manage your resources well in order to avoid having to pay double your installments for bad credit loans.
Bad credit loans are also used to purchase cars. If used specifically to purchase new and used vehicles, they are called car loans.
Different forms come with varying sets of requirements but again if you get them from online lenders, they would probably come with no credit checks.
One thing that you need to be aware of is that these bad credit loans come with higher-than-usual interest rates. However, they allow you to get your needed funds and at the same time re-establish your credit score. You must pay your bad credit loan on time; otherwise, you’ll only face bigger debts.
Applying for Bad Credit Loans
You can apply for a bad credit loan at your local bank. However, if your financial need is small, the best place to apply for such loan is via online. By applying through the lender’s website, you don’t have to drive to the lender’s office, go through embarrassing loan interview, be absent from work or wait in line just to get your loan processed. The approval rate is also very fast that you can have the money you need in as little as 24 hours.