Unsecured Loans for Bad Credit
Getting an unsecured loan for bad credit can be challenging, but it’s not impossible. An unsecured loan is a type of personal loan that doesn’t require collateral, such as a car or house, to secure the loan. Unsecured loans are often considered riskier for lenders, so they typically require borrowers to have higher credit scores.
Even so, bad-credit borrowers who need an unsecured loan have options. These options include finding a lender specializing in bad credit loans, improving your credit score before applying, or seeking alternative lending options.
Read on to learn more about bad credit unsecured loans and how to find the right option for you.
How unsecured loans work
Since unsecured loans are not backed by collateral, the lender relies on the borrower's creditworthiness and income to determine whether they qualify for a loan. As a result, unsecured loans typically come with higher interest rates than secured loans because the lender is taking on more risk by not having any collateral to fall back on if the borrower defaults.
Unsecured loans can be helpful for borrowers at the start of their financial journey because they allow them to access credit without needing collateral. This can be particularly beneficial if you don't own a home or car to use as collateral.
You can use an unsecured loan for various purposes, including paying for your education, consolidating debt, or covering unexpected expenses.
When considering an unsecured loan, it's essential to understand the terms and conditions of the loan, including the interest rate, repayment period, and fees. In addition, consider your ability to repay the unsecured loan and ensure you can comfortably afford the monthly payments before signing.
Can I get an unsecured loan with bad credit?
While having bad or limited credit can complicate getting approved for an unsecured loan, you still have options. Lenders like Advance America specialize in providing loans to borrowers with less-than-perfect credit. We consider other factors when evaluating a borrower's creditworthiness, such as income and employment history.
When seeking an unsecured loan with bad or limited credit, shopping around and comparing offers is vital. You can evaluate interest rates, loan fees, repayment terms, and payment schedules to find a bad-credit unsecured loan you can afford. By doing your due diligence and selecting a reputable lender, you can still access the funds you need, regardless of your credit score.
Types of unsecured loans for bad credit
Here are some different types of unsecured loans for bad credit that you may want to consider:
A payday loan, also known as a cash advance, is a short-term, unsecured loan for bad credit that gives you immediate access to cash. Since payday loans are due on your next payday, they’re intended to be a short-term solution to your financial needs.
Payday loans consist of small-dollar amounts, usually no more than a few hundred dollars. The amount you can borrow depends on your current income and varies by state law. Plus, since you must repay the unsecured loan in full on your next payday, you only want to borrow an amount you can afford to have deducted from your upcoming paycheck.
Installment loans come with longer repayment terms than payday loans, giving you access to more significant dollar amounts. With this unsecured loan for bad credit, you borrow what you need and repay the loan in smaller, multiple payments over time.
Fortunately, some lenders consider various factors when approving installment loan applications. For example, Advance America looks at your current income and job history in addition to your credit history. As such, you may still be approved for an installment loan with bad credit.
Lines of credit
Opening a personal line of credit is another option for borrowers looking for unsecured loans for bad credit. A line of credit is similar to a credit card cash withdrawal in that it’s a convenient way to access money whenever you need it. You’re approved once for a maximum credit amount and can then withdraw funds as needed.
Even if you repay the amount you borrow, your line of credit remains open for future use. This makes having a line of credit an excellent option for covering emergency expenses.
Benefits of unsecured loans for bad credit
Unsecured loans for bad credit offer several benefits. For example, you can take advantage of the following:
- An easy application process
- No collateral requirements
- Fast funding
- Less strict credit score requirements
- Flexible repayment terms may be available
Ultimately, bad-credit unsecured loans give you instant access to cash so you can take care of what matters.
How to get an unsecured loan for bad credit
If you’ve decided that an unsecured loan for bad credit sounds right for you, what’s next? Well, the process to apply is simple! Here are the steps you need to take to get a bad-credit unsecured loan:
1. Choose a lender and unsecured loan
When choosing a lender for a bad-credit unsecured loan, you’ll want to compare interest rates, fees, and repayment terms. It would help if you also considered the lender’s reputation, such as how long they’ve been in business and whether their customer service is friendly and responsive.
2. Gather all necessary documents
After deciding on a lender, find out which documents are needed to apply for an unsecured loan for bad credit. This information is usually listed on the lender’s website or online application, but you can also call ahead if you plan to visit a storefront location.
In most cases, you’ll need your government-issued ID, checking account information, and proof of income – but document requirements vary by state.
3. Fill out and submit an application
Complete your unsecured loan application online, over the phone, or in person. This process typically takes just a few minutes.
4. Wait for approval
After submitting your application for a bad-credit unsecured loan, the lender will decide whether to approve or deny your request. Depending on the lender and the complexity of your application, a decision may take anywhere from a few minutes to a few days.
5. Receive your funds
If approved for an unsecured loan for bad credit, you’ll receive your money according to the lender’s policies. This could mean getting the funds via direct deposit, check, or cash. You can then use the money for whatever purpose you intended, such as paying for a home repair, making a large purchase, or consolidating debt.
Advance America offers unsecured loans for bad credit
At Advance America, we offer a variety of unsecured loans for bad credit, including payday loans, installment loans, and lines of credit. Applications often take just minutes to approve, and you can receive your money by the next business day (if not sooner).
See for yourself what’s made Advance America a standout lender for over 25 years. Apply for an unsecured loan today!