Interest Rates on Bad Credit Loans

If you have struggled with finances, you are aware that your less-than-stellar credit score will limit your funding options. Please have in mind that a borrower with a bad credit score will appear riskier in the eyes of lenders so that they will charge a higher interest rate.

Taking a loan when you have a bad credit score might seem impossible, but this isn’t true. Even if you face financial difficulties, it doesn’t have to mean that you should work with the predatory lenders that want to take your money. Many lenders will give loans to individuals with poor credit scores, so make sure to shop around for offers.

Bad credit loan interest rates

Bad credit loans usually have a poor reputation for the high interest rates. When you submit a loan application, the lender will assess your financial situation. This is usually done by checking your credit history and credit score.

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A borrower that pays their bills on time and doesn’t have missed payments seems trustworthy in the eyes of lenders. If a borrower has had financial difficulties, they see this as a risky customer. They think that a person that has had trouble in the past might fail to make payments on time or respect the terms and agreements.

If a lender assesses a borrower as risky, they have two options available. They will reject the application and refuse to give a loan because they find the borrower risky. Or, they will charge a high interest rate to make it up for the risky loan.

Companies with Good Interest Rates for Bad Credit Loans

A good credit score is considered to be above 670. If your score falls below that, you might have trouble when applying for loans. However, you might still face difficulties such as car repairs or medical bills. Or, you might want to switch a high-interest debt with a low-interest one to save money. Whichever your reason is, be sure that reputable lenders will provide funds even if you have a less than perfect credit score.

OneMain Financial

When you have a bad credit score, secured loans are an excellent way to get a reasonable interest rate. This company offers secured loans for people with a bad credit score. If you own a vehicle, you can use it as collateral to secure your loan. All you need to do is have vehicle insurance and visit one of their physical establishments to get approved.

Avant

The lender caters to individuals with bad credit scores and is known for the flexible payment possibilities. Whether you prefer to use debit or credit cards, personal checks, or digital checks, keep in mind that they offer various options. All of them come with different fees, so choose the one that suits your needs.

Upstart

Upstart will accept individuals with no credit score or lower than 600. They don’t require you to pay fees if paying off the debt earlier than the terms. They can approve amounts up to $50,000, which is a good option if you need money fast.

LendingTree

LendingTree is an online platform that connects you with different lenders so that you can choose the one that suits your needs. On the other hand, the site offers valuable sources for financial education to improve your situation.

Upgrade

This lender doesn’t have a minimum yearly income requirement like other companies. They will credit a minimum score of 620 while considering the borrower’s DTI ratio. Also, they accept co-signers if you have a credit score less than the required minimum.

First Tech Federal Credit Union

The Interest rates start at 6.70%, and they don’t have prepayment penalties if you decide to pay off the loan sooner than the defined terms. The terms range from two to seven years, and you can get your money the same day in most cases.

LendingPoint

This lender allows you to submit an online application and receive the funds the same day. They can lend amounts up to $25,000, with a required minimum credit score of 585.

OneMain Financial

This lender is only available through physical establishments but is spread across 44 countries. They don’t’ charge prepayment penalties and don’t do hard credit checks.

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