Perhaps you may think that installment loans are off-limits to you, if you are unfortunate enough to have been saddled with a bad credit rating. After all, a poor score comes with numerous limitations and a lot of places will reject you outright, without even considering your application. Credit checks can be rough. But not all is lost, and there are options, even for borrowers with bad credit! Keep reading to find out how you can get installment loans for bad credit!
What Are Installment Loans?
Installment loans are, as you can guess from the name, loans that you repay in installments. Like most loans offered nowadays, you apply online, get the amount you need if you get approved, and then start repaying almost immediately. The repayments are made regularly - either weekly or monthly, depending on the loan - until the entire amount is repaid, including interest.
The interest rate on the loans varies, and while some lending companies will offer you a good rate, other places are quite expensive. Depending on your credit score, you can pay as much as two or three times the amount you borrowed to begin with.
I Have A Bad Credit Rating - Can I Get Installment Loans?
One question that is probably going through your mind and that comes up often when it comes to loans is whether credit rating affects installment loans. A lot of people struggle with bad credit and everyone knows that can affect your borrowing ability. Learn more about borrowing with bad credit at Equifax.
How, exactly, can bad credit impact your loans?
- Smaller loan amounts
The first thing that will affect you is the smaller amount you will be able to borrow with your loan. Poor credit will reduce the sum a lender will be willing to give you, because of the increased chance that you might default on the loan.
- Shorter repayment terms
Along with the smaller loan, you might also suffer because of a shorter repayment term. The sooner you must pay the loan, the less time you've got to default on it. A borrower with a history of poor financial judgment is less likely to repay a loan on time, after all.
- High interest rate
And since a lender has to protect themselves against a situation where a borrower with a poor history may default on the loan, the interest rate will typically be very high as well, in order to cover for the eventuality in which they lose out on the money they lent.
The worst case scenario is, of course, getting rejected altogether and not being able to borrow money at all. That can also happen in some cases, if the lending company does not offer any options especially for bad credit.
Can I get installment loans with bad credit?
So, after knowing all of that, can you get installment loans with bad credit? You will be glad to hear that the answer is yes! Bad credit is not the end of the world and you have options you can pursue, as long as you pick the right lender. Here are some choices you can explore:
Payday loans with bad credit
Your first option is going for an offer for bad credit. This type of loan offers money to borrowers with all sorts of scores, regardless of what end of the spectrum you're on. There will be a difference in terms when it comes to details though, depending if you have a good or bad rating.
Payday loans with no credit check
Then, you've got loans that do not require a credit check at all, which you might prefer. This way, a stranger won't go poking into your financial history and innermost details. But how is this option possible? After all, a lender needs to make sure you are trustworthy, right? Well, other checks are performed, such as affordability checks, ID checks, employment checks, etc. Rest assured that the lender will protect themselves.
Are There Any Good Alternatives?
Ok, so maybe installment loans don't sound all that good to you, particularly if you have a poor credit rating that you are struggling with. Are there other ways that can facilitate a loan for you? What borrowing options do you have with a limited rating? Here are some alternatives that you may wish to consider, instead.
If a proper loan is not to your taste, then perhaps you would prefer to use your credit card, instead. Depending on the amount you need, a credit card can be a perfectly adequate option, but pay attention to interest rates - they can be extortionately high.
b) Family Loans vs Installment Loans
And why would you want to borrow from a stranger, anyway, when you can borrow from family? If a close family member has the means and the generosity, you might find a better deal with them; perhaps one that does not involve interest, or forgoes credit checks altogether.
In conclusion, installment loans are proving to be a fairly flexible option that is open to a much wider variety of people than you may have thought. Not only can people with a poor credit rating borrow money with installment loans, but there are actually several options they can take advantage of, suited to their needs and preferences. Perhaps this is precisely why people prefer to choose installment loans in the UK - whether borrowers want payday loans with bad credit or even payday loans with no credit check, they can easily get them at the right lender.