A “No Credit Check” Payday loan may look tempting when you have bad credit. But instead of getting you on the road to financial stability, you will find yourself on the road to a financial nightmare.
So, where can you find personal loans for bad credit?
Peer-to-peer lending platforms offer personal loans for bad credit. Also known as marketplace lenders, peer-to-peer companies were created to help you. P2P founders recognized the need for easy, quick and safe channels to access personal loans when your credit is bad. P2P innovators wanted to create a lane to help you get out of debt, not make it worse.
With a personal loan from a p2p lender, you will have the funds you need to take care of your financial needs. And, even more importantly, you will improve your credit score.
What is Bad Credit?
When we are talking about personal loans for bad credit, we should first look at how we define bad credit. Let’s begin with an overview of credit scores.
As you probably know, your credit score ranges from 300 to 850. You have a score from each of the three credit history reporting agencies: Experian, Equifax, and Transunion. Creditors will pull your credit report from one or all of these agencies.
It very important to check your credit report. Mistakes happen, as well as fraud. Your bad credit may not be due to anything that you have done. Yet it will close important doors.
You should check your report for errors and correct them right away. You are entitled to a free credit report every year. This means you can check your credit report for free, three times a year.
Banks like to give loans to people with excellent credit, meaning 750 or better. But, you can get a bank loan with good credit too, a score between 700 to 749. The financing terms will not be as favorable as they would be if your credit score is excellent.
A score below 649 is labeled bad credit. You will not get financing from a bank with a score like this unless you have a co-signer or collateral.
Your Credit Score Matters
Your credit score impacts your entire life. As we have discussed frequently, your credit score limits more than your financing options. An increasing number of employers are checking out your credit score, landlords are looking too, even auto insurance companies. The common theme is: are you financially responsible?
Truth is, many times your credit score tanks and it is not reflective of your character. Bad stuff happens. Even if you are budgeting, and tracking your money, you can still find yourself with financial emergencies. Healthcare expenses, for instance, is something that can totally derail your financial plans.
Unless you have succeeded in building up an emergency savings account, these events will plunge you into debt. If you get into a pattern of skipping or making your payments late, your credit score will tank.
A Different Way to Evaluate
Peer-to-peer lenders evaluate your creditworthiness differently. As we said above, p2p companies want to help you. Their goal is to get critical financing in the hands of consumers who would be denied by banks. The entire application process is online, which makes these personal loans attractive even if your credit is good. You can skip bank meetings, do everything according to your schedule.
How Do Personal Loans for Bad Credit Improve Your Credit Score?
Personal loans for bad credit from peer-to-peer lenders do more than put money in your hands. They also help to improve your credit score and brighten your financial future. A p2p personal loan is repaid automatically. This ensures that your payments are on time. No late payments. No missed payments. Your credit report will reflect this behavior and your score will improve.
What Kinds of Personal Loans for Bad Credit are Available?
A peer-to-peer lender like Peerform offers personal loans for bad credit to help you with a number of priorities:
- Wedding Loans
- Medical Loans
- Debt Consolidation Loans
- Home Improvement Loans
- Moving & Relocation Loans
Everything is Online
You apply for a personal loan from p2p lenders online. The process is simple. You apply whenever you have the time and from any location. You will receive an answer quickly. You get the money in time to help you cover those wedding costs, or medical procedures or a move across the state.
Bottom line: When it comes to personal loans for bad credit, you have much better options than a payday loan. Peer-to-peer personal loans help you rebuild your life.