- Offers that are guaranteed approval without even a soft check of your credit
- No online presence
- A company name that’s very similar to another big lender
- No registration or license in your state
- Solicitations via phone or door-to-door
- Requests to wire money or pay another person directly
- Unsecure website (no HTTPS in the URL)
- Lack of a physical office location
- Loan offers that sound too good to be true, especially for people with a very poor credit score
Simply put? No, you can’t get loans with bad credit without at least having a soft credit check. Don’t get us wrong: You can apply for a no-credit-check installment loan, which doesn’t require a credit or financial review of any kind. Usually, the companies that offer these insanely high-interest and expensive loans are just as aggressive and predatory as a payday lender.
What Is a No-Credit-Check Installment Loan?
If you’re considering applying for a bad credit personal loan, you may want to think twice-or three times!-before accepting a no-credit-check installment loan. When we say “high” interest rates, what we really mean is astronomical. Some of these no-check lenders charge rates of 400% or more!
Instead of choosing this type of loan, consider alternative solutions. One option is to apply for a personal loan at a credit union, where you could find a loan amount from $500 and up. Since credit unions can only charge a maximum APR of 18%, this type of loan is an excellent choice for borrowers with a bad credit score. Another benefit of a credit union loan is that the approval process will include your entire credit history and other financial information instead of just your credit score. Everyone’s financial situation is different, it’s always best to speak to a financial advisor for professional advice on which option is the best for you.
Types of Loans for People with Poor Credit
When it comes to finding the best personal loan with bad credit, the first step is deciding which type of loan will best fit your financial needs. Let’s look at five of the most common types of loans for people with less-than-perfect credit and how they can help you get the money you need to build a better future.
Secured and Unsecured Personal Loans
Secured loans and unsecured loans are the two primary types of personal loans for people with a bad credit history. The main difference between the two is collateral. Secured loans usually have lower APRs and better terms than unsecured loans because they require collateral, such as your car, house, or other valuables. However, both loan types can feature extra charges, including origination fees or prepayment penalties.
Many people leverage secured loans to pay for a car, mortgage, or home equity loan. People with low credit scores and imperfect histories are more likely to qualify for a secured loan because most companies consider them lower-risk. Why? If you fail to meet the repayment terms, you risk losing your car, house, or whatever you put up as collateral against the loan.
Since unsecured loans don’t require any type of collateral, you’re more likely to get a higher interest rate and see maximum unsecured loan sizes on the smaller end of the scale. Remember, your terms will vary based on your overall creditworthiness and risk level. For example, some people with very low credit scores may not even qualify for a no-collateral loan.
Frankly, most payday loans are simply not a good idea. However, if you’re trying to obtain a small personal loan without having to disclose your credit score, then a payday lender could provide the solution you need.