Here is a sort of a perfect situation if you are already in some problems. You want to get an unsecured loan for bad credit, and finding one in 2016 might be a hard task as there are literally millions of lenders.
So how to find a lender that is transparent about rates and fees, who is flexible and who looks beyond credit score. It is also important to avoid predatory lenders and pawnshop loans who are quite common.
Obtaining a loan will not solve all of you problems, on a contrary, it might even cause new problems.
Actually, why don’t you just avoid unsecured loans altogether. Sure, they might be easy to obtain, but they also tend to have the highest interest rates.
How To Get Unsecured Loans For Bad Credit
Well, first of all, if you are going to get an unsecured loan and you have bad credit, you should know when and how to apply.
Use a co-signer if possible
We call a co-signer everyone who will apply for the loan with you. They come into play if you fail to pay off your loan. To further up your chances of obtaining an unsecured loan, your co-signer should have a good credit score and sufficient income to pay off the loan.
I am sure you are all fired up to ask around for a co-signer, but remember that he or she is taking a massive risk. First of all, they will not able to borrow for themselves as much as they could before. Moreover, they will not get a mortgage for the house because the loan you took must be paid off first. And as said before, if you can not pay off your loan, they must pay it off somehow.So, if you are still thinking of finding a co-signer, think about it as you might ruin someone’s credit score.
So, if you are still thinking of finding a co-signer, think about it as you might ruin someone’s credit score.
Mentionable unsecured loan providers
Avant is a financial service that offer personal unsecured loans. They usually have borrowers who have a credit score of roughly 580 to 700. Although many of the loan startup financial companies tend to rely on the peer-to-peer model, Avant directly funds each loan itself.
If you need a loan quickly, that is good news as they might approve your loan the same day.
The maximum you can borrow is $35,000 and there are not origination fees associated with Avant.
- It is available in 44 states, which is a lot.
- As said before, your loans are funded by Avant.
- No origination fees.
- Generous borrowing limit of $35,000.
- Payment terms can range from one year up to four years.
- Avant does not provide secured loans.
- As a new company, they have not been accredited by BBB.
Just like Avant, NetCredit is an online lender that lends their money even if you have a credit score of 550. I forgot to mention that they offer unsecured large-sum, long-term loans.
There are no fees, other than the interest you pay on your loan. Now, there are some negative things to all of this. APRs can range from 34% up to absurdly high 299% if you have particularly bad credit.
Remember to investigate this kind of loan if you that APR is presented to you. This company lacks BBB accreditation as well.
This company was formerly known as CitiFinancial and they are a relatively long time in this business, from 1912 to be precise. Their specialty is personal loans with a net amount of $15,000.
You can try and apply with them if your credit score is around 630. They reach 43 in states in total which makes them a significant player in the “personal loan” market. Also, if want to do business in person, you should know that they have more than 1,000 branches nationwide.
Unfortunately, their website offers little to no information about APRs and reviews are not that good.
How to spot a loan scam?
If you lend a credit that has a predatory nature, you might be in serious trouble. Just because someone has offered you a loan, that does not mean you should take it right away. You should always keep your eyes open.
Potential red flags:
- Fishy names. Some people have really funny ideas. They simply copy the name of a legitimate lenders and profit from their reputation. When you are going to do business, make sure you are doing it with the right company.
- Scare tactics. When looking for the perfect credit offer, you should take as much time as you need. Do not let some unscrupulous lenders to pressure you just to sign a deal. Stay away from these people and/or companies.
- Avoid upfront fees. Simply put, if a lender is charging you for filling you for an application, he or she is scamming you. Also, it is against the law.
- Avoid guarantees. Every legitimate lender, be that an individual or a company won’t guarantee you with a loan if they do not know your income, credit score and other personal information. If a lender can guarantee you anything, they are probably trying to scam you.
Obtaining the best unsecured loan when you have a bad credit
When obtaining an unsecured loan with bad credit, be sure to evaluate every possible lender you find along. You should aim for a lender that knows credit score is just a part of a bigger picture, you should also understand if a company is trying to make you sign up for a predatory loan.
Just remember to read the fine print as it might save you a lot of trouble. Also, if you are APR is sky-high, you could look for other ways of financing to get the needed cash.