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Loans For Bad Credit

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What Are Loans For Bad Credit?

Having a bad credit score is often a big problem when you apply for a loan. Many lenders use credit score as the sole criteria to judge your capability in paying back the money you borrow. So, if you have a bad credit score, you may want to find lenders that offer loans for bad credits.

Loans for bad credit can be either secured (back by collateral) or unsecured (without collateral). The terms used in these loans may be different from one lender to another as every lender has its own program and condition. It is highly recommended to rely on this loan only if you are fully aware of its requirement, interest rate, and payment period.

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What Is Bad Credit Exactly?

When you apply for a loan, lenders will look through your credit reports. A good credit score means better loan options while a bad one means limited loan options or worse, being rejected.

So, what is bad credit, exactly?

Bad credit is when your credit score falls below the standard. A credit score is a three-digit number ranging from 300 to 850. The higher the number, the better your credit.

  • 800-850: excellent credit
  • 740-799: very good credit
  • 670-739: good credit
  • 580-669: fair credit
  • 300-579: bad credit

As you can see, if your credit score is under 580, you've got bad credit.

Common Types of Bad Credit Loans

Lenders may offer you varieties of bad credit loans depending on your situation and necessity. Some may be a risky choice for you, so be aware of it.

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Secured/Unsecured Personal Loans

Secured loans require collateral of valuable assets, like a house or car. These loans typically offer better interest rates, payment periods, and loan limits. On the other hand, unsecured loans are those that don't require collateral. It may be harder to qualify for this loan especially if you have bad credit. The rate and term you receive would also be very limited.

Payday Loans

As the name suggests, payday loans are short-term loans that have to be paid back as soon as your next payday. These loans generally have less strict requirements and are available only for smaller amounts of dollars. Payday loans are especially helpful when you are in a situation of urgent need.

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Cash Advances

Cash advances are generally provided by your credit card issuer. They are short-term loans in the form of cash which are borrowed from the available balance on your credit card. These loans are probably the fastest way to get funds, but the amount is very limited.

Home Equity Loans

This one may be a solution for you who need a large sum of dollars upfront. Using your home as collateral, lenders offer big money that you have to pay back in fixed monthly terms.

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Student Loans for Bad Credit

While it may not be so common, some personal lenders also offer you funds for education. It is not easy to be qualified for this loan and if you have bad credit you'll almost certainly need a co-signer.

What Should I Check When Choosing a Bad Credit Loan?

In some cases, bad credit loans may offer less strict requirements; however, you still need to be careful in determining if a loan is good for you. Below are some factors to consider.

Eligibility requirements

You can find this information on the lender's website or by directly contacting them. Some pointers include minimum credit scores, minimum income levels, and maximum debt-to-income ratios.

Interest rates and additional charges

The criteria used to calculate your interest may vary from one lender to another. Be flexible! Find a few lenders and compare the interest rates. Never forget to also consider the additional charges.

How to Get Bad Credit Loans Online?

Many lenders have opened up their services to the realm of the Internet. However, It may still be difficult and time-consuming to find one that gives the right offers for your situation.

CocoLoan has solutions in this regard, as we help you connect to lenders from our network. How? You may follow the steps below.

  • 1

    Submit your information

    Fill in your loan request on our website.

  • 2

    Get quotes from our lenders

    You receive offers from our lenders then you can start comparing the rates.

  • 3

    Sign an agreement

    Do this only if you agree with all the requirements and conditions.

  • 4

    Receive your cash

    You may get the money within 24 hours or around 3 business days depending on the lenders.

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Basic Eligibility Requirements For Bad Credit Loans?

Lenders may agree to overlook your bad credit and offer some loan options. However, there are still conditions you'll likely need to meet to qualify for the loans. Some of the most important ones are:

  • Your current credit history shows no problem

    This means that you don't have any currently delinquent debt, and judgments and bankruptcies are resolved.

  • You have enough income to potentially repay the loan

    This will be determined by looking at your debt-to-income ratio.

  • The loan will help improve your financial situation

    Lenders would be more likely to qualify you if the funds help improve your credit, or become more stable financially.

You may also apply with a co-signer if you can't qualify by yourself. However, you have to be careful because missing payment can also hurt your co-signer's credit.

Frequently Asked Questions

  • How easy is it to get a bad credit loan?

    Getting a loan with bad credit tends to be harder. However, it would be relatively easier if you have resolved your credit issues and you have clear potency to pay back the loan.

  • How much can I get from a bad credit loan?

    It generally ranges around $500 - 10000 with collateral and $500 – $1,000 without collateral.

  • Is borrowing bad credit loans risky?

    It depends on the type of loan and the situation you are in. Only take loans that you know you can pay. Avoid loans that may get you into a cycle of repetitive debt.

  • How can I improve my credit score?

    Practice some habits below to improve your credit score.

    • Always pay your debt in time.
    • Lower your credit utilization rate.
    • Don't apply for new accounts too often.
    • Always check your credit reports regularly.
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Get Loans Easily Even If You Have Bad Credit

CocoLoan can help ease your way out to find loans for bad credit. We have long-listing lenders that may offer just the right option for you. So, submit your loan request now and meet your potential lenders.

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