With a credit score of 500 or below you may only be eligible for certain types of loans such as payday loans, title loans, personal installment loans, and pawnshop loans. If you’re specifically in need of an unsecured loan then payday loans online or personal installment loans would be for you. But every lender will have different requirements when it comes to eligibility and cosigners.
There are a few types of loans that borrowers with poor credit scores generally turn to in times of need. It’s an unfortunate fact of life, but having a low credit score makes it difficult to get certain loans and even more difficult to get good interest rates and terms. Below are the most common types of loans that you may be able to get even with bad credit:
Personal Installment Loan: This is a common unsecured loan typically designed for borrowers with low-to-fair credit scores. These loans tend to offer more money than your average pay day loan, as well as more time to repay the loan. The longer and more flexible repayment periods make these an attractive option when compared to payday and title loans.
Payday Loan: A payday loan is also an unsecured loan, meaning you won’t need any collateral to be eligible. The difficult thing about payday loans is that you usually only have about two weeks to repay the loan plus interest. And since payday loans tend to carry higher interest rates they can be tough to repay in such a short period of time.
Title Loan: This is actually a secured loan, but many borrowers with low credit scores use them since they may be able to get a decent amount of money. The problem is that you have to risk losing your vehicle. The collateral you’ll need to get one of these risky loans is the title to your vehicle. So if you can’t repay the loan, the lender may seize it and sell it to recover their money.
No matter which loan you choose, make sure you review all of the terms, conditions, and charges associated with it. And never sign for a loan that you aren’t 100% sure you can repay on time.
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