For most Americans, having bad credit is a significant disadvantage. Bad credit often locks you out from accessing credit cards, bank loans, and other traditional financing options. But what happens when you need access to immediate cash? Quick loans bad credit narrows the gap between traditional loans and newer, more innovative lending options. These loans don’t consider your credit history and you can receive the much-needed funds in a matter of minutes. If you find yourself in an emergency, quick loans online are a good option to turn to.
Over the past few years, online lenders for quick loans have skyrocketed. These companies have realized that many people need short-term assistance with temporary gaps in their budget. Knowing more about quick loans and how they work allows you to find the best lender.
What are quick loans bad credit?
Before you apply for a quick loan online, you should first understand how they work. What exactly is a “quick loan?” Thanks to advancements in technology, financial institutions such as banks, credit unions, and other money market funds can provide loan options to borrowers via the internet.
You will typically fill in an application, after which the lender determines whether you qualify for a loan. Rather than using your credit score or collateral, online loans base their decision to lend on your income and the amount you’re requesting. This means that people with less than stellar credit can still access these loans as long as they can show an ability to repay.
Online loans stand out from traditional financing options because you can receive the money in your bank account in a matter of minutes. Need to fix a broken down car? Done. Did your electricity just get shut off due to a past due bill? Paid. Quick loans online bad credit give borrowers a chance to access immediate cash that will meet temporary gaps in their budget.
Credit scores and loan ratings
You will often hear a lot about credit scores and online loans. Many borrowers get mixed up in all the information and advertising out there, but what exactly is the relationship between bad credit loans and actual credit scores? Simply put, quick online loans for bad credit rarely consider your credit score. This means that whether you have stellar credit, bad credit, or no credit, you can still be eligible for an online loan.
Bad credit online loans are reliable solutions for those who have less than average credit scores (primarily because they can’t access other financing options). To get an idea of which credit scores are considered favorable and which are considered low, take a look at the following breakdown.
- 300-549: Bad credit
- 550-629: Below average credit
- 630-679: Average/Fair credit
- 680-719: Good credit
- 720- 850: Excellent credit
In most traditional financing options, people with a credit score of below 630 are considered subprime borrowers. This means that they’re considered a higher risk when applying for loans or credit cards. If you have a low credit score, you may have experienced first hand the challenges of being locked out of access to financial assistance.
Most bad credit online loan lenders don’t carry out credit checks, and thus they’re the answer to those who need quick access to cash without struggling too much during the application process.
How lenders secure a bad credit loan
If people with bad credit are considered risky borrowers, you may be wondering why so many online lenders are willing to extend loans to such persons. The reality is that Americans with high credit scores are few, with over 50% of Americans having below-average credit scores.
Having bad credit doesn’t necessarily symbolize poor financial planning. Indeed, millions of Americans ended up with bad credit because of situations beyond their control. Some may have experienced high medical bills, paid their college tuition, or inherited poor credit from their parents. Therefore, many borrowers with low credit scores are actually financially responsible. Online lenders know this and thus they provide many unsecured online loans. They know that many borrowers simply need a temporary boost to meet an immediate financial need.
Some lenders may tie the loan to your income and use this as a basis for securing the loan. In such cases, as long as the lender establishes that you have a consistent and reliable income, you will qualify for a loan (often of an amount that you can comfortably repay). With so many bad credit borrowers out there, lenders typically need to cater to this market or else they’ll miss out on customers.
How to find Quick loans online bad credit
Do you have bad credit and you need quick cash? Online loans are a good option to turn to. But with so many lenders out there, how can you identify the perfect loan for you?
Quick loans online can vary significantly in terms of the amount and terms of the loan. Some lenders give you ample time to repay, while others want their money back in less than a month. Some lenders offer interest rates that are through the roof, while others offer rates at par with the current market conditions.
To navigate the market, there are several characteristics you should look for in an ideal lender for online loans.
Lenders who are open to low credit applicants
First and foremost, check to see if the lender is open to applicants with low or no credit. Their approval process should be based on factors other than credit history. In fact, if you apply for loans from lenders who carry out thorough credit checks, this may further affect your credit score. A “hard” credit check shows that you’re taking on further debt and it may affect your credit history moving forward.
Lenders who will accept your level of income
Quick online loans are primarily based on your income. Make sure you look for lenders who accept your income level and provide loans consistent with what you can repay.
Competitive loan terms
Most importantly, look for loans with a competitive APR. A low interest rate and other accompanying fees will help you avoid paying too much for your loan. Also, watch out for extra fees such as late fees and loan refinancing fees. These fees shouldn’t suffocate your budget simply because you needed a bit more time to repay.
Another aspect most borrowers overlook is customer service. There’s a lot that goes into borrowing and repaying a loan, and you need a lender who’s ready to provide guidance at every turn. Most online lenders maintain 24/7 customer service access (either online or via phone). This gives you the peace of mind of accessing help whenever you need it.
Lenders provide more than just quick cash
Lenders who offer quick loans for bad credit do more than just give loans when you need them. They also offer additional services that help borrowers manage their current financial situation.
A major challenge with quick loans is ensuring that borrowers only take what they need, and not simply what they want. Indeed, the convenience of online quick loans can tempt you to borrow unnecessarily. This is because the money is directly deposited in your account (in a matter of minutes) and you may be tempted to spend it unwisely.
Luckily, many online lenders offer advice on when to take out a loan, how to assess your income, and how to budget repayment methods. They also work with you to establish a repayment plan that won’t throw you off budget.
One of the biggest benefits of quick loans is that they’re exactly that: quick. This means that the application process only takes minutes, and you often receive the funds within the same business day. To qualify for a bad credit loan, you simply need to meet the following criteria:
- Be over 18 years old
- Reside in the US and have an active US bank account
- Have a steady and verifiable income
- An active phone number (and sometimes email) that will be used for communication purposes
Quick loans through Bonsai Finance
The biggest challenge that borrowers of quick online loans face is finding a quality and reputable lender. Bonsai Finance streamlines the application process for quick loans bad credit in several ways. First, you only need to fill out one online application for a quick loan. We then connect you with our extensive network of lenders to meet your desired criteria. Finally, we provide you with a refined list of lenders from which you can choose your final option.
Bonsai Finance also has the expertise and experience in matching loan applicants with the best possible lenders in the market. Need a quick online loan for bad credit? Contact us for help today!