iQuanti: If you’re a poor-credit borrower, you may worry that you’ll need to jump through extra hoops to get approved for a loan. Luckily, there are many personal loans out there designed for borrowers who don’t have good credit. Let’s dive deeper into how personal loans for bad credit work and how long it can take to apply for one.
How do poor-credit loans work?
Poor-credit loans are loans available to applicants with poor or fair credit scores. With these loans, borrowers will consider additional factors like your employment history and debt when deciding whether to approve you. Keep in mind that interest rates may be higher for these loans and there might be additional fees.
Here are some types of poor-credit personal loans:
- Cash advance: A cash advance is a poor-credit loan that can give you a few hundred dollars. These loans are designed to help you cover expenses until your next payday, and you’ll typically repay what you owe in two to four weeks.
- Installment loan: With an installment loan, you can receive a lump sum of money all at once. You can then repay what you owe in fixed monthly installments over a few months or years.
- Line of credit: Lines of credit are personal loans that give borrowers access to funds up to a set credit limit. You can draw on these funds as needed, and will only pay interest on what you borrow.
It only takes a few minutes to apply for a poor-credit loan, and approval often happens almost instantly. Once approved, you can receive the funds in your bank account as soon as the same day you apply or within 24 hours. This allows borrowers to start meeting their financial needs immediately.
How to apply for a poor-credit personal loan
Here are the steps borrowers need to take to apply for a poor-credit personal loan:
1. Gather the documents you’ll need
The fastest approvals will often come from online lenders, so gather the documents you’ll need and make digital copies of them. This can be done easily with the camera on your smartphone. You’ll need proof of ID, proof of employment, and proof that you have a bank account. Read the requirements on the lender’s website to get a specific list.
2. Fill out your application
Start filling out your application for a poor-credit personal loan, providing all necessary financial and personal details. This should only take a few minutes and can be done online from the comfort of your home.
3. Submit the final loan application
Double-check your loan application to ensure all the information you filled out is accurate, and then submit it. Many lenders can give you an approval decision in minutes.
4. Review and sign the loan agreement
The final step is to review the loan agreement. Make sure the interest rate, loan terms, and any fees are reasonable. If everything looks good, sign the loan agreement and the funds will be transferred to your checking account.