To borrowers that don’t have great credit, getting a loan may seem more difficult. But luckily, there are many lenders offering loans that approve borrowers with poor and fair credit. Here’s how poor-credit loans work, whether borrowers can get no credit check loans, and some options that may be available to them.
How do poor-credit loans work?
Poor-credit loans are loans designed for borrowers that don’t have a great credit score. Many of these loans, like cash advances, title loans, and installment loans, have easy applications that borrowers can complete online or in store. Loans for borrowers with poor credit also come with quick approvals, so borrowers may be able to get funds the same day they apply.
Although it may be difficult to find a loan with no credit check, many lenders have less strict credit score requirements and approve borrowers with all types of credit scores. They’ll consider factors in addition to credit score, like income and employment history, when making an approval decision. This means borrowers with poor and fair credit can still get approved.
Types of loans for poor-credit borrowers
Here are some loans that poor-credit borrowers can get approved for:
A cash advance is a small dollar loan that can give borrowers quick funds to tide them over until payday. With these loans, borrowers will typically receive a few hundred dollars, and can pay back the loan amount plus interest when they get their next paycheck. The repayment term length is typically two to four weeks.
Title loans are secured loans that allow the borrower to use their car as collateral. After the borrower fills out an application, the lender will appraise their car to determine how much it’s worth. Then, they’ll offer a loan amount typically worth 25 to 50% of the car’s value. The borrower can keep driving their car as they repay the loan.
Installment loans are short-term loans that give the borrower a lump sum of money upfront. The borrower can then repay this loan over time in fixed monthly payments, or installments. Repayment term lengths for installment loans can last from a few months to a few years.
The bottom line
It’s easy for poor-credit borrowers to get a loan. Although they may not be able to find loans with no credit check, there are plenty of lenders that have less strict credit score requirements. Borrowers should shop around and compare lenders and loans to find an option that works for their financial situation. Then, they can fill out a quick application, get approved, and get the funds they need right away to cover expenses.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.