Poor Credit Loans for Short Term Needs
Three numbers dictate so many things for you. You credit score is what dictates if you are approved for a loan. It is what determines if you can buy a house, or a new car. It take a long time to build good credit. In just a few missteps, all you hard work goes down the drain. Once your credit is in the low category, it is hard to bring it back up. It is not impossible to do so, but it will take consistent effort.
What is Considered Poor Credit?
Your credit score is calculated with the data from five different areas, including payment history, length of credit history, utilization, recent activity, and capacity. A poor credit score is 500 to 579, a low credit score is 580 to 619, an ok credit score is 620 to 679 and a good credit score is 680 to 699. A 682 is the number of the average American’s credit score. Something as easy as late payments or numerous missed payments can negatively impact your credit. If you are behind in payments, you can be sure it is showing up on your credit report.
Can I Get a Loan with Poor Credit?
The truth is a traditional lender will not typically approve a loan for an individual that has a credit score under 550. You should consider a score of 550 a high risk. It proves that you have a history of late or missed payments. However, there are some options under 550 loan options available. Any loan you receive will have a high interest rate.
You may want to consider poor credit cash loans online. This option allows you to get approved in less than a day. These types of loans do not look at your credit score. They are interested in how much money you earn and the speed with which you can pay back the money. You are approved for this loan as long as you have income and can prove it with a paystub. They come with high interest rates. You must have a bank account for this type of loan and the lender wants you to provide that information. If you accept this type of loan, make sure you can pay it back timely.
Another consideration for poor credit loans is a payday loan. These are often thought of as poor credit fast cash loans. You should be cautious when it comes to a payday loan. This loan is based solely on the amount of money you get paid. The time to repay the loan is short and the interest is incredibly high. Once approved, the money is in your bank account is less than a day.
Can I Get a Short Term Cash Loan?
Short term cash loans are another consideration for those that need poor credit loans. These closely resemble a payday loan, but are slightly different. Poor credit fast cash loans are a preset amount. Just about anyone can be approved for these loans. They have a short repayment window. You must be sure you can pay back the loan. You also need to make sure that this loan will not put you in a worse financial situation. Poor credit loans are often for small amounts of money. They work best for a situation where you need money for groceries, a minor repair, or small bills. You usually have to pay back the money in two weeks or less.
That is not a lot of time to earn money. However, if you pay back the money timely, you do not have to pay any fees or additional charges. If you cannot pay back the loan, you may need to take out another loan to cover the first one. That puts you in a dangerous cycle.
What Else Should I Know About Poor Credit Loans?
Any type of loan that does not have collateral is considered a personal loan. Mostly, personal loans come from a traditional lending institute. In the case of poor credit loans may come from some non traditional lenders. You should be aware of the positives and negatives to obtaining a loan with bad credit.
Some of the positives of applying for a loan is the ease and speed with which you can apply. You can apply online and have your decision in minutes. The money is in your bank account a short 24 hours later. There are websites that can find lenders for you. You can put in the type of loan you need and instantly have access to many lenders. The application process involves much less paperwork.
Some of the downsides are that you probably are not in good financial shape already. These types of loans may only make that worse. Indeed, they have high interest rates. They have short repayment times, from as short as two weeks to a few months. They have hefty fines if you miss repaying the loan. Typically, you must pay back the loan all at once. You will not have the option for a payment plan. These loans can get you into a cycle of debt that you are not able to get out.
Loan amount limits are typically small amounts. While this may be good because it limits how much you borrow. It is also bad because it most likely will not cover all the debts you owe. You may have to take out numerous loans of this type. Every loan you have puts you further into debt. This may be putting you into a situation you cannot see a way out of.
Conclusion
We all find ourselves in tough financial situations from time to time. Poor credit loans may seem like the answer, but they are not always. You have to weigh all the factors that come with obtaining a loan. Poor credit small cash loans come with a hefty interest rate and a short repayment timeframe. They can often put you in worse financial shape. You must be mindful of these factors. Before you consider poor credit cash loans online, try some other things.
Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.
Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.