It can be easy to get approved for a loan if you need cash quickly and don’t have the best credit score in the world. Some lenders will provide their services for borrowers who struggle to get approved elsewhere.
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There are several types of loans that will cater to those in a tight spot with a less appealing credit score, however, these types of loans do come at a risk.
You can surely get payday loans CreditNinja real easily, but payday loans come with demons, and you need to be aware of this, or you could easily get yourself stuck in a tight spot.
But, if you do desperately need a loan and need an easy application then there are several types you can look at. Let’s take a look at these.
Why Are Easy Loans Troublesome?
Getting an easy loan can surely give you some temporary relief when you are in a financially sticky spot. Yet, these easy loans can become more of a cost to you than you may originally have imagined.
They can easily cause financial distress in the long term. To begin, these loans often come with very hefty interest rates, and their fees are just as high. So, you can expect to be paying out hundreds of dollars, maybe even thousands in interest.
If you wanted a payday loan for example, you might pay less interest, but you will still be changed to an interest rate with three-figures that makes it hard to repay the loan within the due date, which can lead you into spiraling debt.
If you do need a loan to cover a sudden expense, you can consider a few types of loans that are easy to get, or could provide you with a source of finance when you have poor credit.
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Here are your options…
Emergency loans are a type of personal loan which is put in place to cover expenses which you may not have expected such as utility repair, car repair, medical bills and so on. The lender will allow you to borrow $1,000 or even more in some cases.
Occasionally the lender will deposit the funds to you within the same day you sign the agreement.
Interest rates on loans such as these can depend on many things, but of course, your credit score, debt-to income ratio, and your income.
You can expect to pay an interest rate of anywhere from 5.99% to 35.99%. The lower your score is, the higher your interest rate will be. If there are origination fees on top, this can be from 1% to 8%.
The lower your credit score, the higher these fees will be.
A payday loan is a short-term loan that is made to be paid back within your next payday period, or otherwise in 2 weeks from taking the loan out.
Most payday lenders will not check your credit, making these loans very easy to get. Yet, they do come in tow with some hefty drawbacks, as well as heavy interest rates and hefty fees.
Let’s say you have a $300 payday loan for 14 days, in some cases the coverall interest rate can be 650% in some places. Then if you cannot pay this back by the date due you can get rollover fees.
As these loans come with quite high fees they are best to avoid and use only as a last resort. If you can’t repay it, you are only digging yourself into a bigger financial grave.
Then there are bad credit loans, and these are made for those with less than ideal credit. However, you will still need a credit score of about 580 to be able to qualify.
If you do not meet lenders’ minimum credit requirements then getting a ‘no-credit-check’ loan is a possibility. The downfall of these is that they are very similar to a payday loan. They come with high fees and hefty APR’s in their wake.
With a low credit score you can expect to be charged a high interest rate and high fees, some can be up to 35.99%.
Car Title Loans
Car title loans are secured loans, this means you will have to put down collateral in order to get one. This is usually your vehicle title. So, if you cannot repay the loan by the date it is due, the lender can seize your car and sell it again.
This does mean that these loans are very high risk, especially if the vehicle is important to the functioning of your everyday life.
Pawn Shop Loans
Pawn shop loans are also secured loans, with the collateral being whatever valuable item you own which the lender is willing to accept. This could be anything from electronics, to jewelry or anything else of value.
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The lender will give you a loan based upon the item’s value, when you pay back the loan you get the item back, if you cannot pay the loan back the lender gets to keep it and then sell it.
Are There Alternatives?
There are always alternatives to these options. If you want an option that doesn’t come with all the hefty fees and drawbacks that these others do, you have some options.
You could look to credit unions and local banks. If you are a member of one, you can ask them if you qualify for a personal loan. With a relationship with this institution you may get better terms and a more ideal rate.
You can try nonprofits or charities. You should check with a library or chamber of commerce to see if grants are available locally. Income level can qualify you for assistance programs.
If you are unable to afford a bill such as a medical, or phone bill you can ask the company if you can set up a plan. Although you will be charged interest, this is not that different from getting a loan and can be cheaper.