When your credit is good to excellent there are a variety of loan options available. But when trying to find a variety of loans for low credit scores, roadblocks and obstacles are bound to pop up.
Borrowers with low credit scores should expect higher rates for bad credit loans, but it’s also possible to find direct lenders with affordable rates.
In reviewing Badcreditloans.com we looked at interest rates, loan origination fees, flexible repayment options along with early repayment without incurring a penalty.
What is a direct lender?
Direct lenders provide loans directly to borrowers without a lead provider, loan broker, or third-party lender. When you complete a loan application with a lead provider website, they shop your application around to multiple third-party lenders.
For instance, bad credit loans Urban BCL are not direct lenders, they simply take your application and then shop it at multiple lenders.
In some instances, those lenders are tribal lenders offering payday loans that typically have significantly higher interest rates.
Here is one cautionary tale about payday lenders by one user on Reddit’s Poverty Finance forum. “Listen kids, don’t be stupid and accept payday loans. I paid this off early today!”
There are several benefits to utilizing a direct lender for personal loans:
- A direct lender offers you a loan directly.
- Borrowers get the opportunity to evaluate a direct lender based on the factors that are important to you.
- Working with a direct lender may save you money by eliminating the middleman that may not offer you the best interest rate loan.
- You get an interest rate that’s coming directly from the lender.
Direct Lenders working with Bad Credit Loans
Badcreditloans.com works with a network of direct lenders which makes it easier for people with poor credit to get the loan they need.
The company specializes in securing loans for bad credit borrowers and won’t turn you away. The large lender network will present you with multiple loan offers to consider by simply completing one application form.
Pros and Cons of working with Badcreditloans.com
Badcreditloans.com may be a good fit for people that have credit scores below 600.
- Get offers from multiple lenders using on application form.
- Loans range from $500 to $10,000 by the next business day
- Loans often range between 5.99% and 35.99%, although APRs vary according to the information that is supplied by you in your loan request.
- No collateral required
- No pre-payment penalty.
- Cannot borrow over $10,000
- Lender may charge a loan origination fee that can range from 1% to 6% of the total loan amount. Loan origination fees are deducted from the total loan proceeds.
Badcreditloans.com Loan Details
- Loan amounts range from $500 – $10,000.
- Repay monthly, over 3 to 36 months.
- Estimated APR: 5.99% – 35.99%.
- Loan origination fee of can range from 1% to 6% of the loan amount which is deducted directly from your loan funds.
- No prepayment fee.
- No application fees.
- Quick funding after approval.
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How are installment loans different?
Most personal loans fall in the category of installment loans where you borrow a set amount of money all at one time. You then repay the loan over a fixed number of payments with a fixed payment amount, called installments.
Installment loans have a specific length of time you’ll be making payments and a set amount you pay each month. These are more commonly referred to as “loan terms.” You’re probably already familiar with installment loans if you’ve taken out a long-term loan like a mortgage, car, or student loan.
Installment loans can be short-term or long-term and are typically more easily managed than a high-interest payday loan. Installment loans are not backed by any collateral (like a house or car). Unlike a mortgage or car loan, a lender cannot directly seize your assets if you fail to pay back an installment loan.
Installment loans for bad credit can help improve credit scores with timely payments reported to the major credit bureaus.
While payday loans offer a quick turnaround for cash, many people get stuck in a cycle of repeated indebtedness.
According to the Center for Responsible Lending:
The long-term debt is the typical borrower experience and the core of the business model. With each loan flip or new loan, borrowers are unable to both repay the lender and have enough money left until the next payday arrives. Payday loans are a debt trap by design and lead to cascade of other financial consequences such as increased overdraft fees and even bankruptcy.
On average, payday loans carry a 391% APR (annual percentage rate). Installment loans for bad credit are a much better option for borrowers seeking quick cash.
Can you refinance a bad credit loan?
Yes. If your existing bad credit loan is too expensive consider refinancing your loan to get better terms and lower monthly payments.
Refinancing involves replacing an existing loan with a new loan that pays off the debt of the first one. With bad credit loans, there’s an opportunity to improve your credit scores over time.
It’s a good idea to monitor your credit scores for improvement. Once your credit history reflects positive information, you may be able to refinance to a new lender with more favorable terms.
Installment loans can help your credit scores
On-time payments can help build a positive credit history and improve credit scores over time. Payments are reported to the major credit bureaus. If an installment loan is used to consolidate high-interest credit card debt this can improve your credit scores because you lower the amount of credit you are utilizing.