While not the whole reason for the increased demand for quick loans for people with bad credit, these recessionary times have swelled the ranks of people looking for this kind of cash infusion. Foreclosures, bankruptcies, and defaults are the main culprits for this increased demand. Of course, many folks with poor credit existed long before the recent financial turmoil. Faced with an immediate need for cash, many people have only short-term, quick cash, personal unsecured loans as a safety net. Sometimes they just need the funds to keep current on other debts. Lagging utility bills or unexpected emergencies such as auto repairs also contribute to this need.
What You Should Already Know About Quick Bad Credit Loans
Borrow only what you really need, scrutinize your budget to figure out exactly how much you can afford to repay and in what time frame. Do not forget to include interest rates in your calculations. Use the internet to get bids and make applications. Look carefully at interest rates and repayment schedules. Never take the first offer. Documentation is required for these loans: Bona fide picture ID. Social Security Card. Proof of residency. Proof of active bank account. Proof of employment. Understand that loan amounts cannot be too generous and that interest rates are rather high.
Be Aware of Credit History Harm
Are you aware that every application processed by a lender puts a ding on your credit reports. The credit reporting agencies regard a large number of applications for loans much as a doctor regards a drug-seeking patient. These dings lower your scores. Before applying for multiple loans, go online and find a site where you can obtain the free credit reports from all three agencies you are allowed to get every year. When you are seeking bids, explain to your prospective lender that you do not want those credit blemishes and supply them with the scores you have collected yourself. If you decide to use that lender after you get all your bids, then grant authorization to pull your credit reports.
Be Aware of Credit History Help
By employing these loans, if you keep your payment or payments on time, and if you retire the loan in a satisfactory way, your credit score will actually start to show some improvement. Be sure to ask the lender to submit the satisfactory results to all three credit reporting agencies, Transunion, Equifax, and Experian.
Unsecured Loans Are Expensive
Without collateral, without a good credit score, and without co-signers, a lender is taking on quite a bit of risk. The lender compensates for this risk by keeping loan amounts small (Between $500 and $1,000) and charging rather high interest rates. This is the price those with bad credit have to pay but the expense can be negligible if it results in less damage to other credit accounts or provides the cash for emergency expenses. Peace of mind alone can be worth the extra interest costs.
Keeping these facts in mind, you should be able to secure a quick (sometimes the cash can come within hours) personal loan for people with bad credit. Just be wise regarding the amount you request and be sure you have the wherewithal to meet your repayment obligations.
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