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If you need a loan but are currently struggling with a low credit score, you are not alone. In fact, credit scores across the United States have recently been reported to be plunging. As a consequence, you might be wondering who will let you money even though you have a low credit score. Keep reading to find out what bad credit loan options might be available to you and how you may qualify for easy loan approval despite having bad credit.
Understanding Low Credit Score Lending
Having a low credit score â also known as having âbad creditâ â might be more common than you think! Since there are different scoring models such as the FICOÂź Score and Vantage Score, there isnât truly a single definition of what constitutes a bad credit score. For most models however, having a score below 580 or 600 would put you in the âbadâ or âfairâ range on the credit score spectrum. Having a score in that range is usually a result of having missed payments on credit accounts in the past, being maxed out on credit cards, having a short credit history, or having applied for too many loans in the recent past.
Traditional loan providers like banks and credit unions tend to avoid or limit lending to applicants with low credit scores. Thatâs because banks and credit unions primarily use their deposits as a capital source for lending. In order to protect bank and credit union deposits, laws and regulations in the United States make these companies focused on achieving low loan losses and default rates. As a result, bank and credit unions primarily offer credit to borrowers with average or above average credit scores, and low credit score loans are primarily offered by non-bank companies like finance companies, fintech providers, payday loan companies and title loan companies.
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Types of Loans For Low Credit Scores
Now that you understand why banks and credit unions may not be the best fit for a low credit score loan, letâs explore the options you may be able to access, even when your credit is bad:
Bad Credit Personal Loan
Bad credit personal loans are available from numerous providers in the United States. They include both online options from fintech companies like Opploans or Netcredit, and loan options that can be accessed at a loan store, like Mariner Finance or OneMain. What these options have in common is that they are primarily meant for applicants with less-than-perfect credit, and they donât require collateral to qualify. Bad credit personal loans are usually installment loans, which means that they are repaid over several months or years.
Payday Loan
Payday loans are also available through a large number of providers, and can also be accessed online as well as at stores in several states. While not available in all states, they are a popular borrowing option in many. Compared to personal loans, payday loans typically have smaller loan amounts and much shorter loan terms â usually only up to 30 or 60 days.
Retail Credit
Depending on your need for credit, you may be able to access bad credit products at the point of sale where you are looking to make a purchase. Whether you need medical financing for an urgent procedure, or are looking for a line of credit with a retailer, the merchant where you are shopping might be offering credit solutions through a relationship they have with specialty finance companies.
Car Title Loan
Borrowers who need a cash loan and own a paid-off or close to paid-off vehicle can consider borrowing against their car or truck. Car title loans tend to offer larger loan amounts and more flexible approval criteria compared to unsecured loans.
What To Consider Before Borrowing With a Low Credit Score
While there are several credit options available to borrowers with low credit scores, itâs important to make an informed decision before taking out a bad credit loan or line of credit. Before applying or signing a loan agreement, applicants should thoroughly research the pros and cons of each loan option. While the best option depends on the individual circumstances of each applicant, the following factors can be useful to take into consideration:
- Qualification requirements
- Speed and convenience
- Minimum and maximum loan amount
- Repayment terms and affordability
Upon settling on a specific loan option, itâs also recommended that borrowers shop around for the best loan provider for that particular option. This part of the process can entail looking at customer reviews, researching the maximum loan amount available, and applying with several loan companies to shop for the lowest interest rate and Annual Percentage Rate (APR).
Low Credit Score? Consider Auto Title Loans Serviced by LoanMart
With an auto title loan serviced by LoanMart, you may be able to turn your carâs title into funding â and fast1! An auto title loan is a loan secured with your vehicleâs title, but you can keep driving it while repaying your loan.
Thousands of people with low credit scores choose auto title loans because they can be faster than many other ways of borrowing. Itâs possible to have money in your hand in as little as one business day.3 In some cases, you may even be able to get you money the same day depending on when you are approved and how quickly you provide the required title loan documents.1 3
The Auto Title Loan Process
In order to get a title loan with a low credit score, you can follow these three quick and easy steps:1
Step 1: Apply
Apply online or give us a call at 855-422-7412
Step 2: Provide required documents
A few supporting documents are required in order to receive final title loan approval with a low credit score.1 The list is short and you can likely complete this part in under an hour. Simply upload your documents using the customer portal, or email or text us the pictures.
Step 3: Sign your loan and receive funding
Once your paperwork has been reviewed and verified, you can receive final loan approval, and a loan agreement will be prepared for you.1 After signing your loan contract, you can receive your funds â electronically, with a check, or you can pick up your money at a participating money transfer location nearby.
Why Choose a Title Loan Serviced by LoanMart if You Have a Low Credit Score
Title loans serviced by LoanMart understand what youâre going through, having served over 250,000 customers2. We always want to help you find the best and quickest solution to your financial problems at competitive interest rates. Here are some of the benefits you may be able to take advantage of when qualifying for a title loan serviced by LoanMart:1
- Get money fast
- Superior customer service
- Competitive rates
- Possibility to refinance existing title loans1
- Peace of mind guarantee4
Apply online or call us today to see how you may be able to get fast cash from a title loan, regardless of a low credit score1.
