Can One Get a Personal Loan With Poor Credit?

iQuanti: If you don't have a good credit score, you may be wondering if you can still get approved for a loan. Luckily, many lenders offer loans to borrowers with poor credit. Although you may not have every lending option available to you, you still can find some great loan options. Let's dive deeper into how personal loans for poor credit work and the different types available so you can choose the right option for your needs.

How poor credit loans work

Poor-credit loans are designed for borrowers that have a poor credit score due to late payments, maxing out credit cards, or other financial mishaps. With these types of loans, lenders may still take your credit score into consideration, and they also look at other factors when deciding to approve you for a loan. These factors could include income, employment history, or current debts.

Getting a secured loan

If you're applying for a secured personal loan, you'll need to provide an asset you own as collateral, like your car or house. Secured loans tend to be short-term, so they're a good option if you're looking to pay back the funds you borrowed over a month or a few months. Since you're providing the lender with collateral, you typically don't need a good credit score to get approved.

Title loans are secured loans that let you use your car title as collateral to receive the loan. These loans can get you funds worth 25% to 50% of your car's appraised value. Many title loans come with quick application processes, and you may be able to receive your funds the same day you apply or within 24 hours. You can keep driving your car as you repay the loan.

Another type of secured loan that doesn't require good credit is a pawn shop loan. With pawn shop loans, you can provide an item of value you own as collateral, like artwork or jewelry. The pawn shop will offer you funds worth a percentage of the item and will hold onto it as you repay the loan.

Getting an unsecured loan

Unsecured loans are short-term loans that can get you fast funds and won't require you to use an asset as collateral. They can range from small-dollar loans to larger loan amounts. Although lenders may take your credit score into account when deciding to approve you, there are many that will have less strict credit requirements and will consider your income, employment history, and other factors.

Cash advances are a good unsecured loan option for borrowers with poor credit. These loans will give you some extra cash to cover expenses before your next payday, so repayment terms are typically two to four weeks. Cash advances are typically fairly easy to get if you can provide proof of income.

You may also be able to get approved for an installment loan if you have poor credit. These short-term unsecured loans give you a lump sum of money that you'll repay over a set time period via fixed monthly payments, or installments. Installment loans may be right for you if you want a larger sum of money that you can pay back over a longer period of time.

The bottom line

If you have poor credit but need to borrow money, not to worry. There are many secured and unsecured loan options out there from lenders that will approve you if you have poor or fair credit. When looking for the right loan for you, make sure to do your research and compare lenders online. Choose a loan from a lender you can trust with terms that work for your situation.

Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.

Source: iQuanti, Inc.