The easiest type of loan to get with bad credit is unsurprisingly a bad credit loan. But what are these loans exactly? Bad credit loans cover a wide range of loan options; consider them an umbrella term for easy-to-qualify-for loans. Some bad credit loan options include bad credit personal loans, payday loans, and car title loans. All of them make it easy for borrowers with poor credit or no credit to get funding.
Bad credit personal loans are essentially personal loans but with different interest rates and loan amounts than a standard personal loan, making them more accessible to borrowers. Bad credit personal loans should be your first choice when looking for funding with less than good credit.
Payday loans are an extremely short-term loan that offer funding up to a few hundred dollars. Although they are convenient when you need a few hundred dollars at hand, payday loans come with extremely high interest. Those rates coupled with a short repayment period can quickly lead to a cycle of debt. Therefore, it is best to avoid these options if possible.
Car title loans are a type of secured funding which use the borrower’s vehicle as collateral. Because an asset is involved, lenders can take risks when it comes to lending to poor credit applicants. Eligibility and loan amount for a title loan will depend largely on your vehicle, your income, and ability to repay the loan. Average loans funds can range from a few hundred dollars, usually capping around $5,000. Although these loans do make it possible for bad credit borrowers to get funding, they can be risky. Because of their high interest rates and fees, you may find yourself having trouble paying the loan back. If you miss multiple payments your car may be at risk for repossession. And so, like payday loans, you’ll want to stay away from title loans as well.