Have you faced difficulties in applying for loans due to bad credit? Or in need of emergency funds for unexpected expenses but have bad credits? A bad credit loan can be your ideal solution.
Bad credit loans are designed for individuals with poor to low credit histories. They generally have higher interest rates and restrictions than traditional loans. It reduces the lender’s risk of the individual not paying back the loan.
This article will share the popular types of loans for bad credit from the site of WeLoans.
Types of Bad Credit Loans
There are brokers like WeLoans that allow users to get bad credit loans to meet their financial needs. You can also learn from WeLoans’ financial expert Eric Bank, who has shared his vast experience regarding bad credit loans.
The followings are some common types of loans for bad credit people.
Small Loans for Bad Credit
This loan is helpful for individuals with poor credit history yet needs a small loan urgently. However, it has a shorter repayment duration and stricter terms than traditional loans.
Small loans from WeLoans are helpful for emergency expenses, debt consolidation, and other financial needs. Let’s discover its pros and cons:
Pros
- Better accessibility for financial emergencies
- Quick approval in as fast as 24 hours
- Helpful in improving credit scores over time
Cons
- Higher interest rates result in more expensive paybacks
- A shorter repayment period causes more financial strains
- Limited loan amounts that may not be able to cover large expenses
Personal Loans for Bad Credit
Personal loans for bad credit allow individuals to quickly get cash and settle their bills. Borrowers often find it useful for emergencies like medical, repair, or educational fees. Here are the advantages and disadvantages of personal loans for bad credit:
Pros
- Funds can be received as fast as 24 hours after loan approval.
- No risk of losing assets for collateral purposes.
- No restriction on fund spending.
Cons
- It creates risk for individuals for not paying back loans on time
- Potential further credit damage for failed repayments
- Higher interest rates.
Payday Loans for Bad Credit
Payday loans from WeLoans help cover unexpected expenses like car maintenance bills and medical debts before your next payday. The lender assesses the borrowers based on their ability to afford and repay the loan.
So, even those with bad credit can apply for it. Let’s look at the benefits and possible drawbacks of payday loans for bad credit:
Pros
- Individuals will receive their funds within 24 hours after the loan is granted.
- The application can be applied online and in person, which is convenient for borrowers.
- It has a 14-day cooling-off period for individuals to decide whether to proceed with the loan.
Cons
- It is expensive for individuals to repay because of its high-interest rate.
- Lenders might have access to the borrower’s bank account to deduct loan payments directly.
- Borrowers will easily enter a debt spiral if not managed well.
Installment Loans for Bad Credit
Individuals with bad credit scores who can make regular and timely payments can consider installment loans for bad credit. Borrowers often find repayment easier as they can evenly divide the amount over several months. Here are more details about this loan:
Pros
- Duration for repayments is predictable as payments are made monthly.
- Budgeting is easier as the interest rate is fixed.
- Individuals who consistently finance their loans on time will improve their credit scores.
Cons
- The interest rate is high as this loan is designed for individuals with bad credit scores.
- Individuals have to pay a percentage of the total loan as an origination fee.
Quick Loans for Bad Credit
Want to get quick cash for emergencies? A quick loan is your best bet. With this short-term loan, individuals often get their funds in as fast as 24 hours upon approval. You can easily perform this loan online with minimal documentation. Let’s find out its pros and cons:
Pros
- It is a lifesaver as individuals access their funds as fast as 24 hours.
- Easier for individuals to repay loans as repayment options are flexible.
- It is convenient as you can apply it online.
Cons
- Borrowers can easily fall into the cycle of debt with multiple quick loans.
- High-interest rates prevent borrowers from not repaying their loans.
- The repayment duration can be short, resulting in difficulty for borrowers to pay back in full.
Secure Loans for Bad Credit
If you have bad credit but have assets to be used as collateral, secure loans for bad credit are suitable for you. The collateral can be an individual asset like a car or house to help you get a higher loan limit.
Loan rates and terms are also tailored towards the individual, as the lender has some assurance that the loan will be repaid, as it is tied to the individual’s assets. Let’s learn more about its advantages and disadvantages:
Pros
- Collateral for this loan makes approval easier.
- The interest rate is lower than other unsecured loans.
- The loan amount can be higher as this is a secured loan.
- Longer repayment duration makes it more manageable for the borrower.
Cons
- Borrowers will risk losing their collateral when they fail to repay the loan.
- Collateral options are limited as borrowers have bad credit scores.
- The lender needs to assess the collateral making the approval process longer.
Conclusion
In short, there are many types of loans you can go for, even with a bad credit history. Having a clear understanding of these loans available is vital. You’ll be able to pick the right loan while staying within your budget and not strain yourself.
Visit WeLoans for more loan solutions you need!