How to Choose a Bad Credit Loan Provider
If you’re looking for a bad credit loan provider, you should expect tons of louche strangers to court you for your business. They’ll promise they’ll give you cash right here right now, and that comes a credit check. And though that all might seem fantastic in the moment, you can be mighty sure there’s a catch–through the roof annual percentage rates (APRs), short payoff terms, and an entire future of debt rollovers.
If you have an immediate need for a bad credit loan, rest assured it is possible to do it safely. When choosing a lender, make sure they:Before you select a lender, ensure that they:Before deciding on a lender, check if they:
Examine your ability to repay
Your capacity to afford your loan is the most crucial factor that you as well as your lender must consider before you actually borrow money. While a vulturous lender will want to trap you with a quick-term, high-interest debt that you can’t realistically repay (setting off a toxic pattern of re-borrowing at the cost of more interest and fees), a scrupulous one will check your income and review your bank statements before deciding to approve or deny your application based on your demonstrated ability to repay .
Do a soft credit check
You can bet that a loan provider that doesn’t look at your credit isn’t interested in your ability to repay your loan. If your prospective lender doesn’t plan on checking your credit whatsoever, run. At the same time, avoid lenders who do what’s called a hard credit inquiry, which signals credit bureaus and may negatively affect your credit score. These credit inquiries, which require your consent, are run by loan providers or credit card companies and will reflect on your credit report for a maximum of two years.
Better to seek a lender that only runs soft credit checks or inquiries, which have no effect on your credit score. In contrast to hard credit checks, soft credit checks may be performed without your consent. These “light” checks may be done by lenders, employers, landlords and even yourself.
Send payment reports to credit bureaus
Finally, we already know who bad credit loans are for – people with bad credit! Which means, when you repay a loan with a lender that reports payments to the credit bureaus, you are actually improving your credit score over time! In other words, if you pick a lender that reports on-time payments to credit bureaus, you can meet your urgent financial needs with your loan, while being able to gradually rebuild your credit over the long term.