It has to be the toughest position to be in these days: looking for loans with bad credit when so many people are suffering in this economic downturn. Banks are shutting off lending to all but the best consumers. Credit card companies are reducing card limits and raising interest rates to stop their own financial trouble. When you really need a loan, and have bad credit to boot, what can you do?
The fact is that there some lenders, depending on what you need, that are bad credit lenders and offer loans even with blemished credit. That’s not to say that for folks with bad credit scores, such as under 600, there are many products available out there. For some people, access to credit is just going to be difficult until their credit score improves or the economy turns. Don’t bank on the economy though – banks have learned their lesson, and easy credit to subprime customers is probably a thing of the past.
But if your credit score is in the 600-700 range, you might have some options. There are lenders who will lend for secured purposes, such as car loans for bad credit, or bad credit mortgages. You can expect to pay higher fees and interest rates for certain. There may also be additional requirements, such as a certain length of time at your job (expect at least one year), and no major credit trouble in the last two or three years such as a bankruptcy.
You can find lenders online at such sites as LendingTree.com, where they will forward your application for credit to various lenders still willing to do poor credit loans. Or, you can check with your local bank, if you use a large national bank they are more likely to handle such loans. But be aware that most of these loans will be secured loans only, so that there is collateral for the loan. Unsecured bad credit loans are not yet products that most banks feel safe in offering to the public again at this point.
If you are getting mailings from lenders or brokers offering you loans or credit, hold off before you do some research. Many of these offers look – and are – too good to be true, and are loaded with back end fees, charges and the like that can add hundreds of dollars to your debt. As someone with a bad credit report, you want to make sure you aren’t adding to your credit problem, but are finding ways to keep your spending in check. Always compare products when shopping for a bad credit loan.
Finding loans with bad credit isn’t impossible if you really are desperate for additional cash. But given the high interest rates, fees and charges, you might want to work instead on paying off existing debt, and rebuilding your credit score, before taking our loans you might not really need.
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