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How to Get a Personal Loan with Bad Credit

Most banks will only approve a loan if you have a credit score of 660 or higher. Anyone below that is considered a "credit risk" will need someone to co-sign the loan or present additional documents like proof of income and a list of assets.

However, there are personal loans for people who have bad credit. This guide can help you know the types of loans, their pros and cons, and how to apply for them.

What kind of loans can I get if I have bad credit?

Even if you have a low credit score or cannot meet the bank's other requirements, such as employment history or bank statements, you can still apply for a personal loan.

  • Co-signed loans. Your bank may approve a loan if you ask someone to co-sign it. The co-signor guarantees the loan, i.e., will assume responsibility for it if you cannot make the payments. However, co-signed loans will take a lot of time to process because of the number of documents you both have to present.
  • Personal loans from online lenders. Simple Fast Loans offers installment loans for people with bad credit. These loans have more straightforward requirements, short processing times, and faster payouts than co-signed loans.

What to do before taking out a loan

Like any other financial decision, taking out a loan requires some thought and preparation.

Know your current credit score

You can get a free credit score copy through agencies like Experian, Annual Credit Report, and TransUnion. While there are two credit scoring models (FICO and Vantage Score), most lending institutions will ask for the FICO score.

If you have a low score, you can ask for a credit report and double-check if there were any errors, such as payments that were not reflected. For example, many property managers do not report it when you pay rent—and making payments on time is a significant factor in your credit score.

Plan the loan amount

Don't just borrow money because you can. What is the specific purpose of the loan? Is it an urgent need that can't be postponed or paid with alternative sources of income? How will you budget the amount you receive? For example, if you took out an installment loan to pay for medical expenses, calculate how much you will spend on medicines versus doctor's fees.

Planning your loan and then carefully following a budget can help you make better decisions and give you a sense of control. This is very important when you're facing a financial problem. It can also help you form good habits that you can use when making your monthly budget and other financial decisions in the future.

Find trustworthy lenders

Beware of scammers and fraudsters that masquerade as online lenders but are just trying to secure your information or get you to pay for an upfront "processing fee." Then, when you try to get your loan amount, they suddenly disappear.

The signs of a credible, trustworthy lending institution are:

  • Physical offices. Even if you can start the application online, they have physical branches where you either submit documents or can meet with a loan representative. For example, Simple Fast Loans has branches all over the country. This signifies that it is a legitimate and registered business, not a fake or fraudulent website.
  • Transparent information. The loan representative explains the loan package and quickly answers all your questions. If the company has a website, it has a page or FAQ that immediately explains the loan process.
  • Clear process. The lending institution tells you the requirements, the steps you need to take, and whom you can talk to immediately.
  • Quick payouts. The money is sent to you as soon as the application is approved.

Lenders with no process who hide information and give marketing catchphrases like "no credit checks!" or "best loan amounts, guaranteed!" should not be trusted. They are simply trying to distract you or get you to sign an agreement immediately.

Remember, legitimate and responsible lenders will not withhold information nor rush you into taking out a loan. They understand that this is an important financial decision and will guide and assist you through the process—not push you into getting into something you don't understand.  

Choosing a legitimate lender is the most critical decision you can make while looking for a loan for bad credit. Getting scammed is the last thing you need if you are in a tight financial spot.

Got bad credit? Apply for a loan now!

Simple Fast Loans has a simple application process, and once your loan is approved, you receive the money on the same day or the next.

Start your loan application now. Fill up the form and take the first step towards raising emergency cash even if you have bad credit.

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