If you are planning to apply for a short term loans online, one of the questions that you may probably have on your mind is whether you can qualify due to a bad credit score. Many people ask this question because most lenders are looking into the credit history of the borrower.
Most often, if a financial difficulty happens, a borrower may find it even harder to apply for a loan. However, there is an exemption in the case of short-term loans.
Not all lenders giving short-term loans are strict with your credit history. There are lenders that are willing to offer immediate cash, even your credit standing is not good.
Let’s first look into what a bad credit really mean.
Bad credit is the event where a person has a bad history of not paying their financial obligations on time and the chances that they will not be able to pay it on time in the future, according to Investopedia. You may haven’t paid a past debt on time or you may not be able to repay it entirely.
Lenders can look into your credit history by calling credit bureaus. Typically, they use a score between 300 and 850. A credit score of under 580 is bad credit.
People with bad credit standing may find it hard to apply and qualify for a loan. It’s because they are considered risky borrowers over the others.
Where to apply for a short-term loan when you have bad credit?
You may find it challenging to get approved for short-term loans when you have a bad credit score. However, payday loans are the type of loans that approve almost anyone, even you don’t have a good credit standing.
Lenders for this type of loan are looking into your creditworthiness and not your credit history. As long as you have the capacity to pay right now, you are eligible to apply.
It is easy to qualify for payday loans even with bad credit. However, it comes with tight fees and interest. Usually, the annual percentage rates (APR) is 400 percent.
Payday loans are loans that are paid usually in a two-week period or on the borrower’s next paycheck. You may apply it online or through storefront lenders available in your area.
Features of Payday Loans:
- It is paid only one-time during the next payday. It must be settled between two to four weeks from the date you borrowed.
- It is typically a small loan amount.
- You may issue an authorization to the lender to get the payment for your loan from your bank account or issue a post-dated check stating the full balance.
- You may get the loan in cash, check, or it may be deposited into your bank account or prepaid debit card.
How to Repair a Bad Credit
Have you been turned down for a credit card application or a bank credit? Don’t fret because there are ways that can help repair your bad credit.
Applying for a short-term loan is a good way to improve your credit history. If you are able to pay your financial obligation on your next payday, you are more likely to improve it.
You need to correct all the negative marks on your credit report by applying some credit repair techniques or filing a credit report dispute. Concentrate on enhancing your credit score by adding new accounts and ensuring that you are paying them diligently on time.
While you can still apply and get approved for short-term loans online even you have bad credit, you need to work out your finances. If you have been delinquent for paying your dues in the past, you must prioritize getting the negative information out of your credit report.
Keep in mind that even you have good financial standing, you may be needing quick cash at one point in your life. Keeping your credit records clean can help you live a peaceful and less stressful life.
You can sleep and wake up with no worries that your debts are piling up. You need to act maturely in handling your finances. Taking care of your credit profile can save you from lots of troubles in the future.