If you are new to applying for loans at lending firms at the storefront office or online, you might not know that even with a bad credit history, personal loans for bad credit can be obtained. It may not be that easy to find but is still available with some tweaks. In the US, several companies have cropped up to cater to more than 20% of a household that either has no credit or suffer from bad credit. These households make an annual income of less than $15,000 in some cases and need some extra cash just to make ends meet. In place of such a customer base, lending firms like payday agencies offer personal loans for bad credit at high-interest rates.
But, with proper research you should find many online firms that are legit, verified, and used by hundreds. These offers, if not low, competitive rates for personal loans, even with a bad credit mark. How is that possible? This stems from a simple business model a lender is ready to give you $100 in return for significantly more money. They are ready to take a chance.
These small loan agencies help as a mediator to match a lender and a borrower. With the exception being, if they were your friends, you might not have to worry about interests.
A Good Credit Score Goes a Long Way
A good credit score can help you save a lot of money on your mortgage, car insurance, and many other things. But, for several million Americans who suffer from bad credit could end up paying as much as $3000 more than that of a ‘Fair Credit’ guy on an auto loan of $25,000. This also translates into total interests at a university tuition fee. If you have a very good score, you can pay less than half of someone with a fair score. In comparison to that, one with a bad score is in really bad shape here.
Hence, it is useful to know that you can use personal loans for bad credit to obtain or maintain a good credit score or even help build one. Study shows that most, around 73% of Americans use these funds for repaying installments, rent, food, pay for repairs, and even medical bills. It is hard to imagine how people who barely have enough to put food on the table can be forced to pay more than twice than someone who has the money for the same. The credit score that is ‘Fair’, ‘Good’ or ‘Bad’ makes a lot of difference.
Yet, there are a few lending agencies, instead of banks, which can help you with these. They consider all kinds of endorsements that can be used as an alternative for credit score such as a good recommendation from your employer, a guarantee of a friend with a good score and so on. These help you find personal loans for bad credit at a similar interest rate as a fair candidate.
Which Companies Offer Generous Loans for Bad Credit?
To find which online or offline lending agencies specialize with bad credit loans and still offer flexible installments, great online support, low-interest rates, or credit card consolidation, you have to look online. For example, local banks and credit unions always welcome borrowers who have a bad credit history or no credit history and help them get loans at low-interest rates.
There are new companies that get listed online frequently, so reading reviews and online blogs and articles is a good start. When in an emergency, it is a better way to find credit.