When you require an immediate infusion of funds, you might want to look for short-term loans. You might need it for medical bills, car repairs, or indoor plumbing. Whatever the case may be, short-term loans are the most convenient way to get an influx of cash without having to put up too much capital.
But what happens if you have bad credit?
Can I Get A Short-Term Loan With Bad Credit?
This is great news for someone who needed funds quickly. Take advantage of the convenience that these loans offer you and never have to worry about paying off bills again!
Take note that people with better credit scores will likely get better interest rates. They’re seen as less of a risk and are essentially “guaranteed” money.
This is true for all types of loans so you might want to look into raising your credit score wherever possible. Thankfully, paying off your short-term loan in due time raises your credit score! It’s a win-win situation for both the lender and the borrower.
Here’s the thing: you can get a short-term loan even with bad credit. Online short-term loans are available to individuals without credit history or abysmal credit scores.
Because of the shorter terms for payment, lenders are more confident in the borrower’s capability to pay the lender back. This explains the lax requirements for a short-term loan.
What Are The Types of Short-Term Loans For Bad Credit?
A short-term loan can come in a variety of forms. Here’s a list of the 3 most common types available:
Lines of Credit
A line of credit is exactly what it sounds like. Operating similarly to a personal credit card, a business may tap into this line of credit as needed. Monthly payments can then be made depending on how much of the line of credit has been used. This is a popular form of loan as it charges much lower than the usual Annual Percentage Rate.
Small Personal Loans
Small Personal Loans are fixed-rate installment loans that grant you access to cash in lump sums. The terms require you to repay this sum with interest in fixed monthly terms. They offer much lower interest rates than credit cards and definitively better terms than payday loans. Because these are personal loans, they may be used for almost any purpose.
Cash advances are short-term loans used for personal unexpected expenses. In consumer lending, the phrase “cash advance” can also refer to payday loans. Rather than taking into account the borrower’s credit score, the lender determines the size of the loan based on the size of the applicant’s paycheck. Generally, these must be paid back on the borrower’s next payday unless they wish to extend the loan.
Why Choose Short-Term Loans For Bad Credit Over Other Types of Loans?
Short-term loans offer four main advantages:
Quick Access To Cash
The approval period for short-term loans spans from minutes to days. In the financial world, this is the fastest approval process you can find. This quick approval process is made possible by the shorter maturity date of the loans. The borrower’s ability to repay a loan is less likely to change significantly over the course of a couple of months to a year. Thus, there are fewer factors to take into account during the approval process.
Short-term loans are known for their convenience. The requirements for short-term loans are much simpler to meet as they have lower credit score requirements than other types of borrowings. This speeds up the approval process, even if you have a bad credit score.
A short-term loan is often paid within 6 to 18 months. The shorter repayment period means that the amount of interest paid is significantly less when compared to long-term loans.
During times of emergency, a short-term loan is useful as it allows you to cover unexpected costs that require payment in full. The repayment period gives you time to plan, save, and pay back the loan you took for the required amount.
No Collateral Required
Generally, short-term loans don’t require collateral. You don’t have to risk your property, vehicle, or any other asset to raise funds. This is very advantageous for the borrower as the amount of the loan does not depend on the value of the asset you have.
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How Can I Apply For A Short Term Loan With Bad Credit?
While there are many short-term loan borrowers on the internet, no other application process is as easy as CocoLoan’s!
Here’s how you can apply for a short-term loan with bad credit.
2.) Scroll through offers
3.) Select an offer and sign the agreement
4.) Get funded
It’s a simple process that should take no later than a week to fully complete. CocoLoan’s application process can be completed within 5 minutes! We provide a step-by-step guide through the whole process and connect you to a list of lenders that may be what you need.
Once you’ve been connected to our list of lenders, take time to go over the available proposals. You may then select the offer you like and submit additional documentation as requested by the lender. Finally, you can then sign the loan agreement through a secure web portal and have the money transferred to your account as soon as the same business day.
Our network of lenders is more than willing to help you cope with life emergencies like paying medical bills or urgent car repairs. Even with bad credit, you can connect with one of the multiple lenders through one simple form at CocoLoan.
How much would you like to borrow?
What To Pay Special Attention To When Applying?
Here are 3 facets that lenders will usually analyze before giving you a short-term loan:
- Personal Debt Ratio
- Personal Credit Score
- Employment Information
Improving each facet will increase the chances of approval. While your personal credit scores may be crucial elements for loan approvals, it’s not the only factor as you can see.
Make sure to have a detailed breakdown of your expected revenues, expenses, and liabilities to give a better overview of how you plan to pay off the loan and increase your chances of success.
What Is A Short Term loan?
A short-term loan is a short-term fixed-payment installment plan given in exchange for a lump sum. The borrower is allowed to receive cash by promising to pay the lender back over an agreed period.
How To Get A Short Term Loan With No Credit Check?
“No credit check” loans don’t exist. Lenders use “soft credit checks” as this process is mandatory under relevant regulations. Their primary consideration is other factors such as age, income, employment, and other owned assets. If you can’t find any, don’t worry too much about it. While most lenders will carry out some form of a credit check when you apply, many are also willing to consider customers with bad or no credit history.