When you need financial help, have you ever considered personal loans? Louisville, KY residents have many options when it comes to borrowing money. But, a personal loan is a safe, simple, and manageable solution for people at any level of income. Your income is one thing, but your credit rating is another. If you have bad credit, will anyone give you a loan? This article is full of information and tips that will help you realize the answer to that question is a big ol’ YES! Read on to find out where to look for loans in Louisville! 

Louisville, KY: The Basics

Louisville is the largest city in the Commonwealth of Kentucky. It has a population of 1.2 million people in its metropolitan area. The city ranks #29 on the list of America’s largest cities. Louisville was founded in 1778 when the land was still part of the colony of Virginia. As a prominent port along the Ohio River, steamboat travel and the growth of American industry created a boom through the 19th and early 20th centuries. Today, Louisville is home to companies across a wide range of industries. The leading area employers include giants like UPS, Ford Motor Co, and The Kroger Co. Louisville is also one of the world’s leading bourbon producers and the home of the famous Louisville Slugger baseball bats.  

Loans in Louisville

Along with a rich culture and history, Louisville is like many other cities in America. It is full of people like you searching for quick cash loans to put out the financial fires breaking across your budget on any given day. And whether you have good credit or bad credit, personal loans can help you rebuild your finances. 

Secured vs. Unsecured Loans 

Loans come in two forms: secured and unsecured. The difference between secured and unsecured loans lies in an essential part of the lending process: collateral. Collateral, simply put, is a valuable asset given to the lender to hold during the life of the loan. Its value helps guarantee the lender that you will repay the loan. In this way, collateral lowers the risk to the lender while raising the risk to the borrower. 

Secured loans require collateral. They are ideal for financing expensive purchases; the collateral in play lowers rates and gives borrowers more time to pay off the loan. For example, secured auto loans use your car as collateral. This is why a typical auto loan agreement plans your payments over a few years instead of weeks or months. If you fail to pay (default) on your secured loan, the lender can take ownership of the collateral. In the case of an auto loan default, the lender repossesses the car. 

Unsecured loans do not require collateral. Instead of a valuable piece of property, your reputation as a borrower determines loan approval. This reputation, also known as your creditworthiness, is built on your past dealings with other debt or lending situations. Without the need for collateral, unsecured loans are accessible to more borrowers who don’t have assets to risk. On the other side of the coin, no collateral means more risk to the lender, so unsecured loans will have different terms and interest rates than secured loans. 

What Is a Personal Loan

A personal loan covers almost any type of expense. A personal loan is an unsecured loan, so you don’t need many assets to get one. You receive a personal loan in a lump sum and pay back the lender with equal monthly payments or installments. Installment payments include a portion of the principal, plus compounded interest and processing fees.

As an unsecured loan, personal loan lenders can set their requirements for loan approval. To that end, some lenders work with you if you have bad credit. For the most part, bad credit personal loans don’t require a deep dive into your past. And some loan applications only require borrowers to submit the information that verifies their legal residency and proof of employment. 

Where Do I Get a Personal Loan?

Louisville isn’t short on places where you can get a personal loan. But it’s up to you to decide what type of personal loan experience you want. Let’s look at the three primary sources of personal loans.

Banks

Naturally, bank loans are the most familiar option. Bank loans can be easy to manage; a personal loan is often connected to your bank account to make easy installment payments. A bank is only as good as its reputation and holdings, so it considers personal loans with more scrutiny than any other lender you encounter. In other words, a bad credit personal loan from a bank may be difficult to get. 

Credit Unions 

Think of a credit union as a “members only” bank for different groups of people. Credit unions can provide mortgages, car loans, and personal loans. However, you can only access these services if you belong to the credit union. 

Private Lenders 

Private lenders provide the most personal loan options for the most comprehensive range of potential borrowers. Because they don’t have many of the exact requirements for banks and credit unions, private lenders can operate under a “big tent” that can hold borrowers with good credit or bad credit. 

Understanding Your Credit Score

Credit scores come from credit reports. A credit report is a record of a consumer’s financial behavior. The creditors and lenders you work with put information about your activity on your credit report. This information is available to any other entities considering loaning you money or giving you a line of credit. Your credit score consists of these five components: 

Payment History 

Payment history is the most crucial aspect of your credit report. It is the record of late or delinquent payment you have made (or not made) in your life. Your proven ability to pay the debt is critical for almost every lender. Your payment history can get loan approval, even with bad credit. 

Credit Utilization 

If your credit card has a limit of $1,200, and your balance is $300, you have used a quarter of your available credit. That means your credit utilization is 25%. A credit utilization ratio also reveals how quickly you pay back debt. If you keep your utilization below 30%, it can show that you pay on your credit regularly to keep it in check. 

Credit History 

Your credit history begins with the first piece of debt or reoccurring bill in your name. Credit history is the overview of how long you have been managing credit. It gives a lender an idea of how experienced you are as a borrower. 

New Credit 

Every time you apply for a new credit card or loan, a lender looks into your credit report. That examination is called a hard inquiry. The new credit section of your report logs every hard inquiry. Multiple hard inquiries are not attractive to many lenders as they can signal too much financial distress. When you apply for personal loans, try not to apply for any other loans or credit lines at the same time. 

Credit Mix 

Perhaps you currently have a mortgage and a couple of credit cards. If so, you have a good credit mix that shows you can manage different types of loans. While payment history and credit utilization weigh heavier on your score, a sound credit mix can signal good budgeting skills. 

Credit reports come from credit bureaus. These data collection agencies compile your financial information and use a credit score algorithm to calculate a three-digit number ranging from 300-850: 

300-579: Poor
580-669: Fair
670-739: Good
740-799: Very good
800-850: Excellent

As you can see, the higher the credit score, the better your rating. Good credit can provide access to low rates and fees for all different types of personal loans and financing. Does that mean you can’t find a bad credit personal loan to help pay bills? Of course not! Bad credit personal loans are out there—you just need the right lender! 

Will My Credit Score Affect My Personal Loan Options? 

Your credit score is not set in stone. Although you may have bad credit from past financial mistakes, your credit score can improve by making smarter decisions now and in the future. A few simple changes to your lifestyle can drastically raise your score by 100 points in a month! Additionally, keep an eye on your credit score to ensure that it is always accurate. Under federal law, all three major credit bureaus (Equifax, Experian, and TransUnion) provide access to your credit report every year. Take advantage of the access and correct errors on your credit report if they appear. Anything from a mistake about a late payment to a misspelled name can affect your access to personal loans and other financial products made to help you. 

Avoid High-Risk Loans in Louisville, KY

As you look for personal loans, you will run across dozens of loan offers and lenders offering fast cash and easy approvals. They’ll be even more attractive if you have bad credit. Personal loans are good alternatives to these short-term cash loans. They may seem safe and straightforward, but they are more than what they appear to be 

Car Title Loans 

A car title loan is a secured loan for car owners that uses the car’s ownership as collateral. These loans can be high cost and have loan terms that require repayment in less than a month. And like any secured loan, a default on a car title loan means that you lose your wheels forever. When you consider how important your transportation is to your life, a car title loan might be too much of a risk. 

Payday Loans

A payday loan is probably the most famous of all short-term loans. Its core claim is that you can use a payday loan to fill a hole in your finances and repay the loan with your next paycheck. But the staggering APRs and loan terms make payday loans so difficult to pay off many of them roll over into new loans. Eventually, a payday loan often turns into a financial nightmare. 

In the past, payday loans were a few loan options that offered fast cash with minimal loan requirements. But, with the arrival of online private lenders, access to personal loans with more manageable terms is giving people with good and bad credit personal loan choices that were never possible. 

Why Should You Choose CreditNinja Personal Loans?  

Looking for personal loans, Louisville, KY? At CreditNinja, we’ve got you and the rest of the Bluegrass State covered! We strive to make your personal loan journey as smooth as possible.  Here’s what you can always expect when you work with us: 

Easy Application Process 

You don’t need to get a payday loan to avoid rigorous applications and screenings. A CreditNinja personal loan only takes a bit of information and a few minutes to apply. And once your loan agreement is signed, personal loans are sent directly to your bank account. 

Clear Loan Terms 

When you borrow with CreditNinja, you get a crystal clear picture of what your personal loan costs. Your payments, due dates, balances, and loan agreement are always accessible, either online or over the phone. You’ll know where your personal loan stands at all times. 

Excellent Customer Service 

No matter what personal loan option you choose or how easy it is to manage, you’re going to have questions about your loan agreement from time to time. That’s why our customer care team is available to point you in the right direction. 

If you desperately need a loan in Louisville, payday loans are no longer the only short-term cash solution around. Apply for a CreditNinja personal installment loan now, or contact us for more information.

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¹Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications approved before 10:30 a.m. CT Monday – Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case, the loan if approved, will be funded the business day after such additional verification is completed.