Is a Bad Credit Loan the Best Option for You?
Borrowing can be challenging for people with credit below the fair range 580 – 669. People with bad credit typically have negative marks in their credit reports like late payments or accounts that are past due or in collections. A low credit score tells a lender that the applicant is more likely to miss a loan payment, which costs the lender money. Some lenders aren’t willing to take that risk.
Luckily, there are some lenders who focus on offering loans to subprime (bad credit) borrowers and others, like Uprova, that offer loans to borrowers with credit across the spectrum. Learn more about bad credit loans, what to expect, and if they are the best option for you.
What is a bad credit loan?
A bad credit loan is just a loan that is given to someone with bad credit. Lenders who focus on bad credit lending may charge higher origination fees and higher interest rates, which result in a higher annual percentage rate (APR). This helps eliminate some of the risk for the lender who is funding someone with a history of missed payments or past due bills.
While there are fewer lenders who will approve bad credit borrowers, you still have options if you have a credit score that is less than fair. To start, you can work with lenders who regularly work with borrowers like you. Shop around and compare rates to find a lender with the best rate. At Uprova.com, it’s easy to compare rates because it won’t impact your FICO credit score.
What can I expect?
Getting funding when you have bad credit can be challenging. Don’t be surprised if your loan application is denied if you have poor credit history and apply for funding from a traditional lender that works with good credit customers. Expect to do research to find the right lender for your credit type. You may have to do comparison shopping to secure the best terms and rate. Since many lenders will charge higher fees or rates to bad credit borrowers, it’s important to know your options.
If you request a personal loan through Uprova, your FICO credit score won’t be impacted. You can apply online and receive a quick approval decision. If approved, you can receive funds in your account in as soon as one business day.
Are bad credit loans the best option?
When you have an emergency expense, a bad credit loan can be the only option for fast funding. Borrow responsibly to avoid taking on too much debt. You should only borrow what you can afford to pay back by your due date including fees and interest.
If you have time to delay your purchase, you can secure a better loan rate if you improve your credit score. There are a few ways to improve your credit score quickly, like paying down debt and paying off any debt that has gone to collections. However, if you need a loan, you might not have the money to pay off debt.
Summary
Bad credit loans are available to consumers with credit below fair (580-669). There are lenders who focus on providing subprime loans (bad credit loans). You can expect a higher APR if you have bad credit, but funding is available. You may need to comparison shop to secure the lowest rate. If you need funding fast, Uprova has lending options for bad credit borrowers. Visit Uprova.com to request a loan or learn more.