Have a bad credit score? You're not alone. Nearly 108 million Americans have a low or no credit score. Unfortunately, a bad credit score can make it more difficult to save money when it comes to getting good rates on car insurance, credit cards, a mortgage, and lots of other areas where credit scores are taken into account.
In addition, most people don't have enough money to purchase things like cars and houses up front, making it so taking out a mortgage or getting a car loan is a necessity.
The good news is, a good credit score isn't always needed to qualify for installment loans with bad credit. Installment loans allow borrowers to receive a set amount of money all at one time. Repayment for installment loans is done over a set amount of time and at a set amount in regular intervals, typically monthly.
To determine whether you'll qualify for personal installment loans for bad credit, some lenders will look at your current debt and your available income instead of just your credit score. That's why installment loans are generally considered one of the best loan options for borrowers with bad credit scores.
Bad credit is what a creditor has when they possess a history of inconsistent and/or late payments for loan and credit accounts that they have. A bad credit score range is typically about 580 and below.
Your credit score is a numerical value that ranges from 300–850 and is based on factors such as any debt you already have, the length of your credit history, and the history of your payments. This score reflects how well you manage your debt and whether you pay your bills on time. For example: If you pay your bills by their due dates, you will earn a higher score. If you are late to your bills or don't pay them at all, you will accumulate a lower score.
FICO credit scores are broken down as follows:
Lenders of all types will pull your credit score as a part of your application process. They will be wary of lending you money if they see a low score because that means you are a risky investment on their part. A higher credit score means you are less of a risk and will most likely pay them back, and, thus, be approved for a new loan with favorable terms more easily.
A low credit score doesn't necessarily mean you won't be able to get a loan, it just means your loan may come with high interest rates or other penalties for late payments you wouldn't receive with a higher credit score. That's why it's good to shop around to find the best installment loans for bad credit. Some ideas to improve your credit can be found here.
When looking for an installment
loan for bad credit, it's important to compare your options. You don't have to
take the first installment loan you're approved for.
Consider the following factors when comparing installment loans:
loans for bad credit work the same installment loan do for good or great credit.
They all have:
While payday loans are used for situations in which you need a smaller amount of money in a hurry (you could think of these as single, small installment loans for bad credit), installment loans offer more money that can be paid back over a longer period of time. What are the other differences between installment loans for bad credit and other payday loans?
What are they?
These are loans with longer terms in which you can borrow a set amount of money and pay it back over time.
These are short-term loans that help you cover immediate expenses until you get paid again.
How do they work?
You make fixed payments in monthly increments over a time frame of about 3-36 months.
These loans are required to be paid back within about 2-4 weeks, depending on when you receive your paycheck.
What are their borrowing limits?
Limits can vary but typically go up to about $5,000.
Limits can vary but typically up to $1,000.
What's the APR?
APR ranges widely.
Close to 400%
Credit check required?
how do you know if you're eligible for installment loans for bad credit? While
requirements will vary by lender, you'll usually be asked to provide the
Lenders of personal installment loans for bad credit can let you know if you qualify for a loan or not without running a hard credit check. When doing your research into lenders who offer installment loans for bad credit, remember to note who only requires a soft credit check, as this is less likely to damage your credit score.
Ready to apply for installment loans for bad credit? Follow these steps:
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