If you have a job, a checking account, and/or a clean title to a vehicle, but have bad credit, you may be targeted by down payment companies or car title loan companies. Some of the companies that offer bad credit personal loans have been investigated by the Federal Trade Commission. The fees that companies charge for these small loans for bad credit risks are much higher than the fees that banks and other lending institutions charge for standard loans. These bad credit personal loans have been called a debt trap. Before you take out one of these small bad credit loans, consider your options.
If you have a job and a checking account, talk to your bank first. Just because you have bad credit doesn’t mean they won’t approve a small loan. If you have a clean title to a vehicle, then your chances of getting approved are even better. Many people think that because they have bad credit, they will automatically be turned down by a commercial bank or lending institution. They think they will only qualify with companies that advertise “no credit check,” bad credit personal loans, or small loans for bad credit hazards. The truth is that lenders consider different factors when approving loans. If your application is approved and you make your loan payments on time, then you’ll also be building a good credit history. Payday advances and other small credit risk loans are not reported to the credit bureaus. They will not help you improve your credit score.
If the bank doesn’t approve your request, consider borrowing from a friend or family member. You can draw up a promissory note that will be legally binding. If you need money quickly to pay your mortgage, rent, utilities, or another creditor, talk to them first. If you just need a little more time to pay, they will usually work with you. A late payment fee will be less than the fees charged by a company that offers bad credit personal loans.
If you are on active duty or retired military, emergency funds are available. Check with your commanding officer. In fact, companies that offer payday advances and other small bad credit loans are required to inform military personnel that they have other options.
If you must take out one of the personal loans for bad credit, borrow only what you must have to get you through this emergency situation. Borrow only what you can afford on your next payday. Companies that offer payday advances and other small loans for bad credit risks charge rollover fees if you can’t pay on your next payday. Because of these rollover fees, people have paid up to $60 to borrow $100. The rollover fee is not applied to your balance. You cannot make partial payments on these bad credit personal loans. They must be paid in full.
If you are looking for small loans for bad credit risks, then your real problem is bad credit. Once you get over this emergency situation, consider making efforts to repair your credit score. There are DIY kits and companies that offer bad credit repair. It is possible to improve bad credit scores. It takes time, patience, and a bit of know-how, but it’s well worth the effort. Credit repair will likely cost less than the fees charged by bad credit personal loan companies and will save you money in the long run. For more information, visit Credit Fix Solutions.
