What Bad Credit Lenders Don’t Want You to Know?
If you have bad credit and you need something, you may have to seek assistance from bad credit lenders. Bad credit lenders are companies that will issue loans to people who have sub-par credit scores. These lenders issue auto loans for bad credit, personal loans, and other products that consumers need to get by. You might have to talk to a bad credit lender if you’ve had trouble getting financial products from traditional lenders. However, you need to know some of the secrets that such lenders don’t want you to know about their practices and procedures.
Facts About Bad Credit Lenders
Make sure you read through our list and educate yourself before you take a credit card for bad credit or a loan from bad credit lenders. These are the top things that they don’t want you to know.
1. The Interest Rates Might Be High
One thing that you should know about bad credit lenders and their products is that they may be expensive. Bad credit lenders want to make sure that they will get their money back and make a profit, as well. They sometimes boost the interest rates on their loans to compensate for a person’s risky creditworthiness. It could put you in a real bind if you don’t research it first and find out the terms before you sign on the dotted line. Make sure you ask about the interest rate of the loan before you take it.
Some loans are good, but some are more trouble than they’re worth. You want to make sure you’re getting a loan that you can handle, and it doesn’t cost you three times the amount of the loan proceeds. It might be best to get some help from a company that has connections with fair lenders.
2. You May Have to Use Collateral
Another thing you have to watch out for when you deal with bad credit lenders is collateral. Some lenders will give you a loan if you have bad credit only if you agree to put up collateral. Collateral is something of value that you can offer the lender in case you default on the loan. It might be the deed to your home or the title to your car. Those are the most common collateral types. Lenders may also take other offerings such as stocks, bonds, CDs, precious metals, and the like. The goal is not to take your goods away.
The goal is to simply ensure that you repay the funds you borrow. The lender might feel more secure by placing a lien on your property until you pay your loan entirely. The lender will release the lien as soon as you pay all the funds back. It’s as simple as that. Keep this simple fact in mind when you consider getting bad credit loans to pay off debt.
3. The Term May Be Short
You may also find that you have a minimal amount of time to repay the advance you get from the provider. The amount of time you have to repay a loan from a bad credit lender will depend on what type of bad credit loan you get. An installment loan may provide you with 90 days to one year of leeway to repay the advance. On the other hand, a payday loan will only give you about 14 or 15 days to make the payment. If you go the way of a title loan, then you’re looking at about 30 days to return the funds to the lender. Don’t jump into any loan quickly or lightly. Make sure you review your options before you make a final decision on a financial product.
4. There Might Be Hidden Fees
The interest rate isn’t the only thing you have to worry about when you deal with bad credit lenders. Your “loan package” may also come with some hidden fees that you can miss if you don’t pay attention to the fine print and such. Examples of some charges that the lender might add to your loan are processing fees, approval fees, and late fees. There might even be some fees attached to the loan of which you’ve never heard. Again, research and patience are the keys to success when you’re looking for the right loan product for yourself. You should have a financial expert help you sift through the available lenders to find your perfect match.
5. They May Still Check Your Credit
Many bad credit lenders boast about their customers not needing good credit to get cash advances. However, some of them still check your credit. They may do a soft pull just to verify your identity and make sure that you are who you say you are. Other bad credit lenders will look at your credit score the same way a traditional lender looks at it. They may deny you a cash advance, as well. Bad credit lenders don’t guarantee that they will provide you with a loan. They just let you know that they have less stringent qualifying criteria than other lenders have. Some of them say that they approve over 99 percent of their applicants. While that is a high percentage, you still may fall into the percentage of people who don’t gain approvals. You never know.
We can help to connect you with a lender who is highly likely to accept your request and trust you with a loan. We’ve been networking with trustworthy lenders for many years. We will only connect you with legitimate lenders who have positive reviews and honest processes.
6. A Bad Credit Loan Can Still Affect Your Credit Score
Keep in mind that a bad credit loan can still affect your credit score even if the lender doesn’t use your score to qualify you. If you fall delinquent, a bad credit lender can still report your delinquency to a credit bureau. A delinquent loan can make your credit score go down significantly, and it can cause you more problems getting approved for the products you need in the future. The lender still has the right to do debt collections on you, as well. Your debt will subject you to the same harassment and negative profile notches that you could get from a traditional lender.
7. Some Bad Credit Lenders Are Better Than Others
The world did not create bad credit lenders equally. Some lenders care about the customers, and they do everything in their power to treat them fairly and give them the money they need for their emergencies. Other lenders, however, do not have the customer’s best interests at heart. These lenders behave like loan sharks. They do not work with their clients or give them the benefit of the doubt. They charge sky-high interest rates and give their clients no time to repay their loans. You don’t want that kind of lender. You want a lender that has a compassionate and caring nature. We can help you find such a lender.
8. Short-Term Loans May Be Limited
Many short-term loans for bad credit are limited in the loan amounts. For example, you may only qualify to receive $100 the first time you borrow something from a bad credit lender. That might not be anywhere near the amount of money you need for what you’re trying to do. The good news is that some other lenders may offer you up to $2,500. The even better news is that you can get much more than that if you own a new vehicle. A brief consultation with one of our agents can bring your needs to light. We can then get you in contact with some companies that are designed to meet those needs.
9. You Might Have to Have a Bank Account
Some bad credit lenders will require you to have a bank account in good standing. That means that it should be active for at least three months before you can use it to secure a bad credit loan. Also, your bank account will have to have a positive balance, and you cannot have any insufficient funds transactions or anything like that. The reason they ask for a bank account is that they will use it to disburse your funds. When it’s time for you to make your first payment, they will use that same bank account to deduct it. Bank account transfers make loans and repayments easy and hassle-free for everyone involved.
10. You Still Need a Qualifying Income
Even though you are applying for a bad credit loan, you still have to meet certain criteria. One of the qualifying factors might be your income. Generally, bad credit lenders like to see an income of at least $1,500 a month before they will consider giving you loan proceeds. You will most likely have to submit four pay stubs for them to review so that they can make their decision.
11. You Might Qualify for a Fair Credit Loan
Before you look into getting help from bad credit lenders, you may want to see if you can get help from a fair credit lender. Your credit score might be right on the line of bad credit and fair credit. It’s worth a try to see if you can get assistance from fair credit lenders because they can offer you a much better interest rate for the loan you get from them. We have a database of a variety of lenders, and we’re equipped to connect you with ones that are likely to respond to your request with an approval.
12. You May Have to Pay a Penalty if You’re Late
Bad credit lenders often have stiff penalties for late payments. You might end up having to pay a hefty penalty for being only a day late. That’s why it’s smart to read the fine print and ask all the questions you can think of before you get involved. You won’t want to find out when it’s way too late that you have to pay dearly for late payment.
13. You Could Lose Your Collateral
If you put up collateral for your bad credit loan, you have to make sure that you can repay the advance on time. Bad credit lenders will put liens on your property, and the liens will give them the right to take your property as a means to get their funds back. For example, you can keep driving your car while you’re paying your loan if you have a title loan. The lender can repossess your vehicle if you default on the loan, however. You must think long and hard before you decide to put your items up for collateral. Only take a loan from a bad credit lender if there’s no other way you can get it, and you need it immediately.
14. Not All Lenders Have a License
It will do you well to investigate all lenders you consider. That means you need to check to ensure that they have licensure to give loans in your state. You should also visit their website and look for accolades and affiliations with reputable companies and organizations. That will provide you with a better idea of whether you can trust the new lending company or not. Go with your instincts if you feel that a particular provider won’t be a good fit for you.
Do your research and go with a reputable lender. Our partner Fiona may have some suggestions for you. Put in your information below for potential offers:
15. You May Need a List of References
If you desire to take a bad credit loan, you may have to provide the bad credit lender with a lot of information. They are taking a chance by giving you a large sum of money. Therefore, they will want to be 100 percent sure that they can retrieve their funds if need be. They may request that you provide the names and telephone numbers of three to six people they can contact about your loan worthiness. They may call these individuals before they approve you, or they may wait and see if you make your payments on time and only use your references if that happens.
16. Bad Credit Loans Are Best for Emergencies
Because of the fees and interest rates involved with bad credit loans, they are best used in emergencies. You should first see if there’s any other way you can get your hands on the funds you desire. Try talking to family and friends. See if your employer is willing to offer you an advance. Try some applications that can help you get funds from your paycheck. If you can’t solve your issue with any of those solutions, then you may proceed to the bad credit lenders and complete an application.
17. You Should Read Reviews
You should always read consumer reviews before you sign up for anything, including a bad credit loan. Consumers are very honest about the experiences they have with lenders, and they are willing to tell the stories. Read through a large number of reviews to see if you come across any repetitive complaints. This can be very helpful if you want a loan for your new car or to travel somewhere. Be suspicious of any company where you read a lot of negative comments.
18. Some Loans Roll Over
Be mindful of your payment date, and do your best to take care of the payment at that time. Some loans automatically roll over when you don’t pay them on time. The rollover might add fees that you are not prepared to pay. Again, this information will always be in the fine print.
19. The BBB Score Tells a Lot
Check with the Better Business Bureau and see if the company you’re considering has an account with them. The BBB score measures the number of complaints and complaint resolutions each company has, and it comes up with a grade score based on that information. You should only consider doing business with a provider that has a rating higher than a C.
20. You Should Review Your Budget
Most importantly, you must review your budget before you take a loan from bad credit lenders. Let’s say that you need a bad credit loan to cover your wedding expenses. It is important to calculate your disposable income and make sure that you will have the funds to repay the provider after you calculate the interest and fees. If everything looks good, you can feel confident completing an application and asking for help from the provider.
Now you know a lot of the truth about bad credit personal loan lenders. They are not all bad by any means. Some lenders are very kind and courteous to debtors, and they genuinely want to help those people get the products they need. Our company works with a variety of lenders. We connect people with all credit scores with the lenders that match their needs and their situation. We have been assisting consumers for many years and have helped a multitude of people. Contact us by telephone or short form. We would love to assist you if you need a loan, and you think you have a bad credit score.
Let one of our agents know that you’re looking for loan products for low credit scores. The agent will join you in your journey to find a reliable lender who will most likely approve your request. We will try our best to help you, but you have to reach out to us to get the process started.
Ethan founded Goalry, Inc in Dec 2016 with the mission to build the world’s first and only Financial Goal Mall. One place to reach financial goals and comparison shop for any money matter. Taub invents the IP for the finance stores within the mall, while overseeing various aspects of the company. He also has orchestrated the company’s earned media across the finance stores: Accury®, Billry®, Budgetry®, Debtry®, Cashry®, Creditry®, Loanry®, Taxry® and Wealthry®. This includes over 1200 blogs, 400 videos, thousands of social post and publications that have been featured across the web.