Having a low credit score is not desirable. For the most part, it shuts you out of different funding opportunities and restricts the types of loans that you can access. Borrowers with a poor credit history usually rely on bad credit loans to get funding in times of need or emergency. However, most bad credit loans may not come as quickly as you would like them.
Opting for bad credit loans with an offer for same-day funding is a better way to bypass the long time it takes to receive regular loan deposits. In this article, you can find out how early you can expect to receive regular loans and the difference in speed when you choose quick bad credit loans. There is also comprehensive information about brokers like WeLoans that allow you to access fast bad credit loans in times of emergency.
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What Are Bad Credit Loans?
Bad credit loans are financial products designed for individuals with a low credit score or a limited credit history. These loans can be a lifeline for people who need access to credit but have been unable to qualify for conventional loans due to their credit history. You can find online loans for bad credit at WeLoans.
Lenders that provide bad credit loan options usually have additional requirements that compensate for the risk they take on with bad credit borrowers. Most times, they require you to have proof of income or provide valuable items as security. To also ensure that your credit score is not worsened further by applying, they typically conduct a soft credit pull on your information.
What Are Different Types of Bad Credit Loans?
A common broad classification of bad credit loans will be secured and unsecured bad credit loans. One of WeLoans’ financial experts Eric Bank, agrees that lots of borrowers don’t really understand the differences between secured and unsecured loans. Generally, secured bad credit loans are forms of funding that require you to provide collateral before you can get a loan. On the other hand, unsecured loans offer bad credit borrowers cash without any item deposited as a guarantee.
Below is a breakdown of the examples of secured and unsecured bad credit loans you can find at popular online lenders.
Payday Loans
These are a common form of unsecured loan that allows you to take out a loan and repay it with your next paycheck. Payday loans are short-term funding options, providing minimal sums of money, usually less than $1,000. You are also required to repay within two to four weeks, but they come with outrageous annual percentage rates.
Personal Loans
Another form of unsecured bad credit loan, this credit facility avails you of large sums, payable in monthly installments. You can secure personal loans from lenders or through brokers. The terms and APR are fixed, but for bad credit borrowers, they can be a bit higher than usual.
Auto Title Loans
If you own a vehicle, you can use it as collateral for a title loan. Simply submit the car title and have lenders inspect the car. You will get a percentage of the car’s total value as a loan while you continue using the vehicle until you repay fully. Due to the nature of this loan, it is regarded as a secured credit facility.
Pawnshop Loans
These are another type of secured loan for bad credit borrowers. All you have to do is exchange an item of value for a loan. You will still maintain ownership of the item, but the lender has a right to sell it off if you default on the repayment.
Can I Get Bad Credit Loans on the Same Day?
It is possible to get a bad credit loan on the same day, but it will depend on the lender and the type of loan you are seeking. Some lenders may be able to process your loan application and disburse the funds on the same day, especially if you apply online and provide all the necessary documentation.
However, other lenders may take longer to process your loan application and disburse the funds, especially if you need to provide additional documentation or if you are applying for a larger loan.
If you are in a hurry to get a bad credit loan and need the funds on the same day, it’s a good idea to shop around. Brokers like WeLoans allow you to compare multiple lenders to find one that can meet your needs. You can also get your loan credited to your account as early as the same business day you apply.
Pros and Cons of Bad Credit Loans
Bad credit loans can have good sides and demerits. No credit facility promises only benefits, and bad credit loans are no exception. So, before you accept a loan offer, consider the following advantages and disadvantages to determine if it’s the right fit for you.
Advantages:
Here are some of the perks of getting bad credit loans.
- Flexibility: Bad credit loans can be used for a variety of purposes, such as consolidating debt, paying for unexpected expenses, or financing a major purchase.
- Opportunity to improve credit: Repaying a bad credit loan on time can help improve your credit score, which can open up access to more favorable loan terms in the future.
- Fast funding: Some bad credit loan lenders can credit the funds to your account on the same day. This can be helpful in an emergency or if you need access to cash quickly.
Disadvantages:
Bad credit loans also have demerits. Here are some of them.
- Higher interest rates: Bad credit loans may come with higher interest rates compared to loans for people with good credit. This means you may end up paying more in the long run.
- Risk of predatory lending: It’s important to be cautious when seeking a bad credit loan, as some lenders may engage in predatory lending practices that can be harmful to borrowers.
- Fees: Some bad credit loans come with origination fees, application fees, or other types of fees that can add to the overall cost of the loan.
Final Thoughts
With bad credit loans, you can have more funding options if you have a poor credit history. They also present an excellent opportunity to improve your credit rating and receive fast funding. However, they may attract some high fees and APRs. The best way to get a good deal is to search for bad credit loans at WeLoans, a reputable broker. That way, you can compare different offers and opt for one that promises the best terms.
