Having bad credit doesn’t mean that you can’t get a loan.
Many people start stressing out when they need money but have bad credit. Although bad credit will limit your options in terms of what kind of loan you can get, there are a variety of lenders that will work with people that have bad credit.
When you’re looking for quick loans for bad credit, you can expect to pay higher interest rates and potentially have to provide collateral. However, you’ll be able to borrow a decent amount of money depending on the loan that you get.
Read on to learn more about bad credit loans and how to get one.
What Do Lenders Look At?
While lenders prefer people with good credit, it’s still possible to get a loan even with bad credit. Before you should apply for a loan, you should be aware of the several things that lenders look at when determining if someone is eligible:
Lenders will want to see how often you’ve gotten loans and for how much. If they see that someone is constantly applying for loans, they’ll be less likely to loan you money because this means that if you can’t sustain yourself, you won’t be able to pay them back.
Repaying any debt is extremely important when getting a loan because lenders will want to be sure that you’ll repay them. They’ll look at your payment history to see if you’ve been making payments on time. Some lenders are more strict than others, so they might even want to see if you’ve been making an effort to pay more than the minimum.
Credit utilization is how much credit you use that’s provided to you. For example, if your line of credit is $3500 and you borrow $3500, your credit utilization is 100%. This doesn’t look good to lenders because it shows you’re not making an effort to build a nest egg.
Aside from having a solid payment history, lenders want to look at your financial status to determine if you’d be a good fit. This will include things like your current debt and monthly income. If you’re making little to no money, lenders most likely won’t give you a loan unless you provide some sort of collateral.
Types of Loans
Now that we’ve discussed what lenders look at when someone applies for a loan, we’ll go over what kind of bad credit loans are out there. Keep in mind that while these are loans people with bad credit usually go for, you’re not guaranteed to get accepted for a loan.
Here are the most common types of loans for bad credit scores:
A personal loan is one of the most common loans that people apply for because most banks and credit institutions offer these. They often come with varying payment periods depending on the conditions of the loan.
A payday loan is similar to a personal loan, but the reason why they’re called “payday” loans is that the payment periods usually don’t go longer than 2 weeks. These loans usually have high interest rates, but they’re easy to get.
Short-term loans are also similar to personal loans, but they’re able to be renewed. The payment periods for short-term loans don’t extend past 1 year, but they’re more accessible than a standard personal loan because the application process is much quicker.
How to Build Credit
When you have bad credit, your loan options will be limited. Fortunately, there are a variety of ways you can build credit so that you can get better interest rates and more loan options:
Pay Off Debt
Paying any debt that you have will be one of the most effective ways to build your credit. This will also look good to lenders because they’ll see that you’re making an effort to eliminate your debt. If you currently have a credit card, use it for small things, like gas, and pay the balance immediately.
Don’t Max Out Credit
You do not want to max out any credit cards. Remember, your credit utilization is important to lenders and your credit score. Whenever you borrow, be sure not to go anywhere near the limit so that your credit score can increase when you make purchases.
Be an Authorized User on Someone’s Credit Card
When it comes to credit cards, authorized users are people that are allowed to use the card of someone else. If your parents use credit cards, see if you can get authorized on theirs. The best part about doing this is that your score will go up while your parents use the card.
How to Get Quick Loans for Bad Credit
Here at Captain Cash, we can provide you with short-term loans that you can use for your business or personal use. If you read our “How does it work?” section, you’ll see that you can apply for one of our loans via our website or by phone.
To apply for one of our short-term loans, you’ll need to be a Canadian adult and earn over $1200 each month. Even if you have bad credit, we’ll work with you to come up with a plan that allows you to get money fast. Providing that your application is approved before 2 PM EST, you’ll receive your money the same day!
Get a Quick Loan Today!
We understand that money can be tight sometimes. That’s why we at Captain Cash have developed a strategy that allows those with bad credit to get a loan when they need money. While your credit history will matter to any lender, we can work with you no matter what your history is.
There are several types of quick loans for bad credit, such as a personal loan, payday loan, and short-term loan. You can build your credit by paying off debt, using little credit, and becoming an authorized user on someone else’s credit card.
If you’re interested in applying for a loan, go ahead and claim your cash with our loan application today.