The hard part about having bad credit is that you face a more challenging time trying to get a loan approved. However, getting installment loans is not impossible, even if your credit score is low. There are just a few extra considerations you need to make.
How to Get a Loan on Bad Credit
You can get an installment loan on bad credit by simply choosing a lender that is willing to approve you. Different lenders have unique criteria for each loan, but most will take your income, debt, and employment history into account.
If you can prove you have a steady income and can afford to make the loan payments, you will likely be able to get the loans you need.
Once you find a suitable lender, you'll want to complete the necessary forms and figure out the repayment terms and interest rates you'll be facing. To be eligible, you should provide your full name, identification details (like age and other IDs), proof of income, and your social security number.
Interest, Amounts, and Repayment
Most installment loans have a maximum interest rate of 36%. Of course, interest rates do vary based on the lender, the loan type, and the credit score. You need to consider this when getting your loan, as it will affect your debt over time.
When you have bad credit, lenders will usually offer higher interest rates as a security measure. It is also best to figure out whether you are getting a fixed interest rate or variable rates that may change over time.
You'll also want to pin down how much you're getting. This can range from hundreds to thousands of dollars, and you should settle how often you get payouts.
As for repayment, you should note that lenders may charge extra fees for administration if your credit score is on the lower end of the spectrum. You need to know all these details because it will affect how you pay back your loan. The last thing you want is to ding your credit score even more.
Installment vs. Other Loans
It's always good to do your research before picking a loan. After all, there are differences between installment loans and others out there.
For instance, an installment loan may be more rigid with its terms and have higher interest rates, but it also helps build credit because your repayment history can be reported to the relevant bureaus.
This type of loan is also repaid over a specified period of time, as opposed to a lump sum. While this may be convenient in terms of managing debt expenses, you also need to be mindful of the annual percentage rate (APR). Your APR is separate from your interest rate and can be very high if you don't check it.
Bad credit is not a life sentence. You can manage your finances better by getting the right loans and paying your bills on time. Having good financial habits, keeping your debt to income ratio low, and building your credit over time will help you get the financing you need.
Getting a loan may be challenging if you have bad credit, but it isn't the end of your financial hopes.
Reach out to Central Loan & Finance if you’re looking for a lender that provides reasonable installment loans in Atlanta, GA. Contact us to apply in just ten minutes.