How to Compare Poor-Credit Loans

iQuanti: If you’re working to improve your credit score and need access to money, you may feel like there are no options available. Luckily, there are many lenders offering poor-credit loan options that can get you the funds you need. Here are the five areas you’ll want to assess to appropriately compare loans for poor credit.
Eligibility Requirements
Lenders that offer poor-credit loans will have various eligibility requirements they’ll consider in lieu of a high credit score. Some other factors lenders may look at include:
If you meet the eligibility criteria, you may be able to pre-qualify to gauge how much the lender may be willing to let you borrow. Pre-qualifying for a loan can be done quickly online and only requires a soft credit pull, which won’t affect your credit score.
Interest Rates
Since lenders take a bigger risk on borrowers with lower credit scores, they may charge them a higher interest rate. When you compare poor-credit loan providers, look at the top of the rate range as that’s likely what those with lower scores will pay. Even a minor difference in the interest rate can mean significant savings over time. And anything you save in interest can be used to repay the loan faster.
Maximum Loan Amounts
Some poor-credit loans have lower limits on the amount you can borrow, so it’s essential to assess your loan options based on how much you need. For example, unsecured loans like personal loans may have lower limits than a secured loan like a title loan, which has collateral to back it up.
Repayment Terms
The length of your repayment term is an important factor to consider. Opting for a loan with a shorter repayment term length can help you save money on interest, but this can also mean higher monthly payments. If you can’t afford to go this route, a loan with lower monthly payments and a longer repayment term may be the better choice. Compare loan repayment term lengths and consider your financial situation to find the right option for you.
Additional Fees
Specific fees may be bundled into the cost of your loan, like origination fees. But it’s essential to assess the lender on other fees for late payment or prepayments. Also, inquire about any hidden fees that may not be advertised but could be applied later. Checking for these fees upfront will clue you into the total potential cost of the loan if it’s not repaid in full and on time.
The Bottom Line
Poor-credit loans are a beneficial option to get you access to the money you need in a pinch. And comparing lenders and loan options based on certain criteria will ensure you get the best possible deal. As you review loan options, be sure to check specifics like eligibility criteria, interest rates, maximum loan amounts, repayment terms, and additional fees. Fully understanding the loan elements and expectations for repayment means you’ll be able to choose the right option for your needs, even with poor credit.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
Source: iQuanti, Inc.