I Need a Loan But I Have Bad Credit

by : Everett Maclachlan

With gas and food prices at record highs and general inflation on the rise, the average working person with a poor credit score in today's economy has two major concerns on their mind. How to fulfill their short-term cash needs and how to preserve their long-term financial health. Fortunately, a short term bad credit loan can help you with both even if you have bad credit. 

I Need a Loan But I Have Bad Credit
Short term loans are even available to people with a poor credit score (or FICO score). There are 2 types of short term loans you can consider;

  • An immediately available, unsecured (requires no collateral required) cash advance or
  • 2 to 5 year loan from a bank or other lender. 

Before you consider taking out a bad credit loan, here are 5 things you need to consider if you need a loan but have bad credit.

1). A short term loan can improve your credit score and this can help you get better quality loans in future. 

If having a poor credit score or credit history is a concern for you, taking out a short term loan can actually help your situation. The reason for this is that a full 35% (more than one-third!) of your credit score is calculated based upon your payment history. So, by taking out and then making on-time repayments to your loan can have a very positive effect on your score. In this sense, you can choose to think of the higher interest payments as an investment in your long-term financial health. If better score, you can qualify for other longer term loans. 

2) The bad credit loan can be paid off quickly, saving you money:

Whether your short term loan is of the unsecured cash advance kind or the secured, 2 - 5 year loan variety, the repayment period will in any case be fairly short. This shorter payoff period means that, even though the interest rate for your short term bad credit loan will be higher than it would be for other types of loans, the total amount of the interest payments you make could actually be much lower than if you took out a lower-interest, longer-term loan. This means money in your pocket.

3) You can get a short term loan even if you have limited collateral.

There are many lenders in the market today who are willing to extend you a short term loan even if you do not have any collateral (e.g., financial investments, a car, a house of for which you own a significant portion of equity, etc.). If you are in a situation whereby you need cash fast but do not have any collateral to provide, getting a cash advance-type of loan may be your best bet. The only drawback to these unsecured loans is that there is a stricter limit to the total amount you can borrow, with maximum borrowing amounts often ranging from $2,500 to $25,000 for most lenders.

4) Even if you have bad credit, you can get lenders to compete for your business to give you the best rate:

Given the large number of reputable lenders in the marketplace willing to extend a short-term loan to people with poor credit histories, you can actually get lenders to compete against each other to give you the lowest interest rate possible. Remember, even saving 3 or 5% off of your loan's interest rate can mean a huge savings to you each month during your repayment period.

5) You can apply for your loan online to get your cash more quickly:

There are a great many lenders who will approve you for cash advance and other types of short term loans right online. Usually, the application process can take less than 10 minutes. Most lenders also offer a toll-free phone option for those people who prefer to apply that way.

I Need a Loan But I Have Bad Credit
In a nutshell, if you have bad credit, go for short term bad credit loan. Such a loan can be just the thing to provide you with quick access to cash when you are in need. If you select the right lender by comparing options, you will be able to get the best deal possible in terms of securing the lowest-possible interest rate. And, getting this type of loan can actually help your long-term financial health by improving your credit score if you make regular, on-time repayments.