Monthly Archives: December 2014

How Critical Is Your Credit Profile To Your Online Loan Approval

Lots of people today have bad credit, due to mistakes, mismanagement of past credit or the economy. If you have found yourself a little short of cash for upcoming expenses having bad credit does not bar you from finding an installment loan. You can opt for a secured installment loan, but there are plenty of unsecured installment loan options available for you. You should be aware however that An installment loan is a relatively expensive way of borrowing, especially if you have bad credit. The reason that an installment loan can be an expensive option if you have bad credit is that the lender is taking considerable risk by merely agreeing to lend to someone with poor credit. The rate of default is much higher when loaning to someone with a history of late payments and charge offs so to even out the risk pool they charge a much higher rate to everyone in the pool.

When should you consider taking out an installment loan when you have bad credit? Only in emergencies. Do not consider taking out an installment loan for frivolous expenses such as a vacation or a night out on the town. You should only borrow to meet serious expenses which are unavoidable. You need to avoid being trapped in a cycle of lending and borrowing.

If you are able to repay the loan, understand how much interest you are going to be paying and understand fully how the loan repayments will affect your available cash flow then a short term installment loan is a viable option for an emergency expense. While you might pay a higher interest rate than someone with good credit, the good news is that if you repay the loan on time it will boost your credit score up.

Before taking out any such loan be sure to receive a a clear statement of all applicable fees and charges, including interest, prior to you taking out the loan. Read up on what the late fees may be and what happens if you should default. Most problems with short term loans are due to borrowers not fully understanding the loans terms and conditions, fees, and interest rates. When you fully understand your loans terms, conditions and fine print you are avoiding any unpleasant surprises like hidden fees, charges or insurance costs.

Before filing out any application do a through background check on the company you are going to be doing business with. One easy way to do this is to use Google putting in the company name plus the terms “review”,”scam” and “complaint”. Take reviews with a grain of salt however but if every review is negative and nothing but complaints this should be a red flag. You generally also want to deal directly with the lender not a 3rd party loan broker.

What do you need for a short term installment loan when you have bad credit? Not very much, most lenders only require the following:

Be a U.S. citizen and reside in a state that allows short term installment loans.
Be at least 21 years of page.
Have a checking account with direct deposit set up.
Have held your job for at least 6 months, and able to prove that you are currently employed.
Earn at a minimum $1,000 monthly.

Holiday financing and short term loans should be explored after you have exhausted all other options, visited a local bank or credit union and reviewed in depth how much money you truly need, your ability to repay a loan and potential areas you can save and reduce your expenses in 2015.