What Defines Bad Credit?
If your credit score is below 630, your credit score is considered bad. However, some people will have difficulty getting a loan at an affordable interest rate if their credit score is somewhat higher than this.
What Are Some Benefits of Getting A Personal Loan:
There are numerous reasons why you should consider getting a personal loan if you have bad credit. Getting a loan can help you build your credit score. In addition, a personal loan can be used to consolidate debt. Personal loans for debt consolidation can allow you to pay a lower interest rate than you paid before you got the debt consolidation loan. In most cases, the requirements for a personal loan are not as stringent as the requirements for business loans.
Is It Difficult to Get A Personal Loan with Bad Credit?
There are multiple ways that you can get a loan if you have bad credit. It’s always important to make sure that the loan you choose has a low-interest rate and is offered by a reputable lender. These are some of the ways to get one:
Consider A Fresh Start Loan:
Many credit unions, local banks and other financial entities offer fresh start loans. Fresh start loans are specifically designed for people with poor credit. Some of them have flexible terms and lower interest rates. Below are some examples of various fresh start loans (Note: qualification requirements will differ from one entity to another):
- Payoff: The interest rate is usually between 8 and 25%, and you can qualify for the loan with a credit score of 640.
- Marcus: The interest rate is generally between 7 and 24%, and the loan is available to people with a credit score as low as 580.
- Upstart: Upstart loans have an interest rate typically around 17.5%, and you can get them if you have a credit score as low as 620.
- Upgrade: The interest rate of these loans can be anywhere from 6 to 36%. It’s possible to qualify for a loan with a credit score as low as 620.
- One Main Financial: The interest rate is typically between 18 and 26% and there aren’t any credit restrictions.
- Avant: This loan is available to people with a credit score of 580 or higher, and the typical interest rate is between 10 and 36%. These loans can be great for debt consolidation.
- Lending Club: The minimum credit score required for this loan is 600, and the interest rate is generally between 6 and 36%. These loans can be great for debt consolidation.
Consider Using Lending Tree:
Lending Tree lets you search for personal loans. This website has the listings of loans from multiple lenders. You can find loans from most major banks, and the website is easy to use. The application process is usually fairly easy.
Get A Co-Signer:
If you have a co-signer, they’ll take on the responsibility for the loan if you default on it. It’s often possible to get a personal loan with a co-signer even if you have no credit history at all.