How to Find Installment Loans for Bad Credit?

Life has a way of throwing curve balls at us, one minute you may be ok financially but the next you are wallowing in debt and are unable to meet your basic needs.  There are options you could pursue, for example, you can get small short-term loans, but sometimes it can be a challenge.  If you have bad credit, it makes it especially hard to approach a lender because few are willing to take the risk.  Fortunately, there are installment loans for bad credit, and we will give you tips on how to find them below.

Understanding bad credit loans

If we are to take the most basic explanation, bad credit loans are loans for people with bad credit rating.  A bad credit score is a mathematical computation that takes into consideration your past financial history, including your ability to make payments for mortgage, credit cards among others.  The credit score agencies use your history to determine your financial situation and get a score, usually between 0 to 1000. If your score is above 650, it means your credit rating is good. Those with credit scores below 620 have a pool rating, and most lenders will not deem them creditworthy.

We will explore some best loans for bad credit in case you find that you are in this situation and need a helping hand.

Fast payday loans

You will get a fast payday loan based on your income.  The loans may be a paradox in themselves because why would you need a loan based on your income if you can survive on it.  However, some emergencies will force you to take a loan, with a promise to the lender that your future income will cover the amount.

The main advantage of such loans is that you get the money very quickly.  However,   they do have their disadvantages, Payment terms usually are stringent, and failure to adhere will result in penalties.  You will also need to have a steady source of income, and they are, therefore, more suited for those in formal employment.

Personal loans

Even with bad credit, you can get a personal loan, but you should be careful to negotiate for repayment terms that you can easily handle. 

Personal loans are some of the best loans for bad credit but, you will pay a higher interest rate.  The high interest is because; the lender will give you money with the full knowledge that you may not afford to make the repayments.  The interest rate is, therefore, a buffer for them as they need to recover as much of their money as possible during the repayment period.

In taking a personal loan, you need to decide whether you want a long-term or small short term loans. The advantage of a long-term loan is that you can spread out the repayment period of over longer time thus allowing you to negotiate for lower interest rates.  You are better off going with the fixed interest rate so that you know that every month you are liable to pay a certain amount and within a certain number of years or months you have finished the loan.

By approaching short term loans direct lenders, you can get small cash loans which are great if you require quick cash, but you do not have much flexibility concerning the repayment period.  You need to factor in the interest rate which will be high.

Title loans

Title loans may not be the best loans for bad credit but, if you require money, you may sometimes have no choice.  A title loan is an example of a secured loan and will require that you use your car title as collateral. The amount of money you get will depend on the value of your car, and if you are not able to repay the loan, you will lose the vehicle.  The Interest rates on such loans are high.

Final thoughts

We have shared with you options that you can consider if you find yourself in a cash crunch but cannot approach the conventional lender do to your bad credit score.  Only take a loan if you need it because bad credit loans are expensive in the long run due to their high-interest rate.