Bad Credit Loans

If you have bad credit, or no credit history, you might be wondering if you can qualify for a loan. Credit score is one of the most important factors considered by banks and other lending institutions in determining loan eligibility. A poor credit score can prevent you from receiving a loan, or it might mean that you will end up paying much higher interest rates that someone with a clean credit history. While bad credit might limit your borrowing options, it doesn’t necessarily mean that you cant get credit.

The following guidelines and suggestions will help you get a loan now, and help to ensure you wont be denied in the future.

No Credit Loans

If you have bad credit, and you are aware of it, then you probably cringe at the thought of a credit check. You probably know what the answer to your loan application will be before you fill it out. So, why bother wasting your time and the banks? The good news is that there are alternatives to traditional credit score based loans.

Payday loan or cash advance companies are probably the best option if you don’t want your potential creditors to know about your less than stellar credit history. Payday loan companies offer simplified application processes with very quick approval. Typically, an applicant can have cash in their hands in less than an hour. Furthermore, there is usually no requirement for a credit check.

You will, however, have to provide proof of employment or another steady source of income. Cash advance loans are very short term; normally repayment is required on the day that you receive your next paycheck.

Be prepared to pay for this convenience. Usually a flat fee is charged on the loan, around 20% of the amount borrowed. Additional transaction and access fees may also be charged and can quickly add up. If the cost of a payday loan is annualized to calculate the APR (annual percentage rate) the figure is usually in the several hundred percent range. Paying twenty or thirty times what a credit card charges in not unusual.

Secured Credit Card

A secured credit card is another option for people with poor or little credit history. These credit cards work by requiring a security deposit. The credit limit on the card is usually in proportion to the deposit.

This option is not going to be very useful for someone who needs a tangible cash infusion, but it is an option for people with bad credit. It provides the cardholder with the convenience of a credit card, with the benefit of building a positive credit history.

Don’t Over Apply

If you know you have bad credit, then stop applying for loans. If you don’t know what your credit score is, find out.

Every time you apply for a loan your credit score is accessed by the lending institution and every time your credit score is accessed it acts against your score, lowering it.

Over time this can add up, keeping you in perpetual credit purgatory.