The world of borrowing has come a long way. With credit scores, most lending companies can know right from the start of your application exactly how much they’ll lend you and what your interest rate will be.
You have many options when it comes to taking out loans, but perhaps the most worrisome is the emergency loan – the one you take out when you absolutely need it and you need it now. We’ll get into where to turn if you find yourself not only needing money but your less-than-desirable credit score keeps you from getting it from your bank or preferred lender.
If you land in an emergency situation where you need money, but your credit score has fallen below 600 for whatever reason, your bank may not qualify you for a loan. Either that or you’ll receive an interest rate that falls at the higher end of the lender’s range.
There are companies that offer bad-credit personal loans that are not backed by collateral as would be the case for normal loans. Lenders instead look at your credit score, credit report, and debt-to-income ratio in order to find out whether you’re qualified for the loan.
These personal loans can be used for anything you might need, and they are significantly safer to use than payday loans or title loans.
These companies will offer personal loans to you generally starting at credit scores of 580. Some do not have a minimum credit score, but be prepared for higher interest rates depending on your score.
These interest rates might seem borderline predatory, especially the highest at almost 36%, which you can expect for the lowest credit scores. However, bear in mind that your credit card may already be charging you at least 25%.
Many emergency personal loan companies, especially those above, treat their customers like customers. Their websites have phone numbers and customer support, and you can apply with relative ease.
These companies are significantly safer to work with than payday loan or title loan companies, which can lock you into loans that are borderline predatory.
Emergency loans come with more stress than other loans, but you may want to try to take a deep breath and read the fine print on any emergency personal loan you take out so you can make sure you can keep up with the payments.
If you don’t have an emergency fund and need to pay for medical bills or emergency car repairs, then you need money. While the best option is to avoid such situations at all costs, life happens sometimes.
It may not be common knowledge, but you can generally go rate shopping at several different companies to find out which will provide the best rate, but this should be done within a 2-week period to avoid damaging your credit score. Make sure that, when applying, you know whether the lender is making a hard inquiry or a soft inquiry on your credit report.
Sometimes, you need money to pay for emergencies. Ideally, you have an emergency fund put together, but not everyone can be so lucky. Taking out a personal loan may be your best option. Do some research on these companies and find out if they’ll lend to you and what interest rate they’ll charge, then make your decision.