Unsecured Loans for Bad Credit

How do bad credit loans work?

These are designed for an individual with low credit scores and everyone can't get a loan approved with lower credit. So, there are certain loan providers, who will help in offering the loan amounts even if they have a low credit score.

They would rather check on other eligibility criteria like income level, employment status etc. and then approve the required loan amount.

The lender will ask for the required documents which will help them decide if the borrower is eligible to apply for the loan or not. After the checklist is done, then the amount will be disbursed within a day or two to the bank account.

Are bad credit loans more expensive?

Few lenders offer bad credit loans irrespective of the borrower's credit score. Different lenders have different interest rates. While these interest rates are highly dependent on various eligibility criteria, most lenders will look at the credit score and then charge the interest rates. Since bad credit loans are for borrowers who are having a low credit score, the interest charged will be higher compared to other loans that do not approve loans for the ones who have a bad credit score.

How much I can borrow if I have bad credit?

Approving the loan amount is completely based on the eligibility criteria that the lenders present. While if the borrower has a low credit score, then there are other criteria that the lenders check on, which decide on the amount of loan that needs to be approved. If the borrower has a good level of income and stable employment, then there are chances to get the required loan amount or the lenders would try to provide an alternative solution.

What made me have a bad credit history?

If an individual with a bad credit score, then there might be a lot of reasons for it.

• Doing hard inquiries- Making multiple loan applications leads to hard inquiries every time the borrower tries to apply for a loan or credit. This will give a negative effect on the credit score.
• Have never availed credit earlier: When the borrower is not having any loan or credit card earlier or is taking the loan for the first time, then the credit score will be low, as there is no chance for the borrower to improve the score in the first place.
• Not repaying existing loans on time: If the borrower is not repaying the already existing loans on time, then the credit score will gradually decrease and make it difficult to get other loans approved in future.

When should I use a bad credit loan?

Bad credit loans can be used for various purposes, irrespective of the need, as the lender will never ask for the reason behind taking the loan. These loans are generally taken when there is a financial emergency, and these loans can be taken by individuals who are having a bad credit score and can be used for any such financial emergency purposes.