Do you have bad credit but are in need of a fast cash loan? Click here for six things to know before you get this special type of loan.
In the past year, 34% of American households dealt with a large, unexpected expense. While only 39% said they had enough money to cover a setback of $1,000.
With that said, obtaining fast cash loans has become more commonplace than ever to assist people with covering expenses. But there is a lot you need to know before applying for a loan; especially if your credit is bad.
In this guide, we’ll tell you everything you need to know about getting a quick loan. So, continue reading!
What You Should Know Before Getting a Fast Cash Loan
There are very few situations that are more stressful than needing a quick loan while having bad credit. In this situation, you are often quickly rejected for credit cards and other suitable options.
But don’t let that get you down. There are payday loans no credit check and many other options for you.
Here are 6 things you need to know before getting started:
- Be Mindful About the Rates
Quick cash loans have a reputation for having higher than normal interest rates. So, you shouldn’t ever sign with the first lender you come across.
The best way to know exactly how much money you will owe in the end is to ask about the interest fees early on.
For all loans, you want to look at the annual percentage rates (APR). The APR will tell you how much money will be added to the loan over the course of a year.
This is especially true if you are using a short-term loan because the fees tend to add up here. Additionally, ask your lender about any convenience fees that might be charged.
Loans are meant to help if you’ve come into a hard time financially. However, you want to make sure you can truly afford to pay it off.
- Learn What Other Borrowers Experienced
One of the biggest benefits of the internet is that it allows consumers the freedom to research products and companies before spending money with them. So, take advantage of this option when applying for a loan.
Check out the reviews on the lenders’ websites and social media pages while you’re still shopping around. Past borrowers are going to be the best resource when it comes to predicting the type of experience you will have.
If you see several complaints about hidden fees, bad customer service, or aggressive collections tactics, try to find another lender. If the reviews are positive and the company seems honest, you’ve probably found a good one.
- Read the Fine Print
Most people are guilty of quickly skimming through user agreements, especially when signing up for a service online. But this decision is more important than signing up for a streaming service.
Your loan agreement is a legal document that can have a huge influence on your financial standing. There are things that you need to be 100% clear on such as the:
- Repayment terms
- Interest rate
- The term of the loan
With that said, you should be examining every part of the document. Shady lenders will purposely put less attractive terms in the fine print or by using vague language.
If you don’t understand something, be sure to ask the lender for clarification. Also, see what you find through a Google search.
- Learn How Your Credit Score Will React
If your credit score is already low, there should certainly be a goal to increase it. You should also understand that certain loans will affect your credit score in different ways.
For instance, if the loan you are applying for requires a credit check, the inquiry can cause your credit score to lower a few points. This is known as a hard inquiry which can stay on your credit report for about two years.
Additionally, the repayment process can affect your credit score as well. Ask the lender if they will report your payment history to the credit bureaus.
If they do, the loan can help you improve your credit while also helping you out of your financial hardship.
- There Are Two Types of Personal Loans
If you are looking for a loan that gets cash to you quickly, your best bet is to obtain a personal loan. So, you have to know about the two types of personal loans that exist.
Secured Loans: This type of loan is backed by collateral. You can use anything from your house to a car, jewelry, or antiques to serve this purpose.
If you get to the point where you cannot repay your secured loan, the lender will take your collateral as a payment.
Unsecured Loans: These are the complete opposite, there is no collateral. The lender will determine whether you qualify by looking at your finances and employment history.
- Where Can You Get a Loan?
In this situation, your bank is probably the first place you’d think to go for a loan. But there are other options that have higher approval rates for bad credit.
- Online lenders
- Peer to peer lenders
- Consumer finance companies
- Credit unions
Online lenders are becoming more common for obtaining quick loans with bad credit. Often time, you will have the cash in your bank account in 24 hours or less.
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Having a low credit score doesn’t mean you can’t benefit from a fast cash loan when you need one. You just need to do some research to ensure you are as informed and safe as possible in the process.
For more financial tips and advice, follow our blog today.