Even when payday loans have been made available to all with little collateral and requirements, certain individuals still have difficulty getting them. Because of the desperate situations faced by many, they’ve been considered as “Bad Credit” to certain online payday loan companies. Their previous track records often flag them off new loan opportunities. However, a few organizations have decided to gamble on these individuals and grant them loans instead. Stay with me as I share the needy greed of installment loans for bad credit.
official source – online payday loans for bad credit is almost an impossible task without the right information and guide. Today, we’ve had individuals lose their properties over loans for mortgages, legal fees, student tuition, and other crucial situations that need quick cash. As a bad credit borrower, there are loan options available for you to get access to the money required. Let’s get right to all you need to know to acquire online payday loans for bad credit.
Credit Scores vs. Online Payday Loans for Bad Credit
For folks with bad credit records to ever get an online payday loan, they need to have a minimum point on their credit scores. So now, what’s a credit score? Credit scores are always determined and standardized by one too many factors; however, the common of them all is FICO. A FICO credit score is often the first and vital criterion every online payday lender looks at before considering you a loan.
Now that we’ve established that short introduction on credit scores, let’s share briefly how they are calculated. According to FICO, an individual’s credit score is calculated based on five important categories. Your Credit Mix, which is 10% of the score, Payments History taking 35% of the score, new credit with 10% of your score, Amounts Owed (30%), and Length of Credit History (15%). Regardless, note that these percentages are just the standards, the scores change with regards to every individual’s track record.
Loan Options for Bad Credit Individuals
Your minimum credit score of 700-750 isn’t a stamped guarantee for online payday platforms to lend you cash. The credit score only brings you out of the danger zone. What truly guarantees your access to a loan is knowing the borrowing options available to you.
When in a financial situation that requires quick cash, you genuinely do not want your fate to be on trial and error. Making prior research on loan options for bad credit would be a smart move here. Check out the details of lending options for bad credit loans below;
- Unsecured Loans: A cash advance loan, as most people like to refer to it is a loan that requires no credit score. No form of track record or those criteria needed for a credit score is required. All a lender needs is a documentation of your current earnings to help figure what fraction of it can be loaned to you. This loan option is dependent on your geographical area because most states can be strict on unsecured loans. Nonetheless, you should expect to make a signed agreement to pay back the loaned amount in a 2-4week timeline. But the interesting thing about payday loans is the option of getting a new loan to clear your previous loan. Interesting right?
- Secured Loans: Unlike unsecured loans that offer a fraction of your earnings, secured loans get you to access loans of a large amount provided you have some collateral. It is secured because it always involves collateral as a home or car ownership document. Since the lender is taking a high risk by loaning you cash irrespective of your bad credit, they need some assurance in the form of stocks or sometimes properties. Be prepared to lose whatever collateral that was tendered if the payback agreement were to be breached and results in you not paying.
Do Online Loan Platforms Extend To Bad Credit Individuals?
With a lot of online payday loans nowadays, people with bad credit track records still ask the above question. Truly because lenders take full advantage of the fact that bad credit folks are tied down to such terrible situations. Not neglecting the fact that it involves a huge business risk lending out these loans, some online payday lenders do not have the decency to set reasonable terms.
Thankfully, online investors with a heart for the people have surfaced in recent years and have rare packages for bad credit. These options do require some form of criteria and documentation, but yes, they are out in your best interest. Also, note that these loans are mostly short-term and require that you pay back in a stipulated time. Considering the challenges bad credit individuals have faced in recent years, these online platforms come as a lifesaver, in my opinion.