What are Bad Credit Loans & How to Get It?

What are Bad Credit Loans & How to Get It?

A bad credit loan is a type of personal loan offered to borrowers with weak, bad, or no credit. There are many different loans and many different types of financial institutions that offer them-banks, credit unions, and online lenders, among others.

Benefits of Bad Credit Loans:

• No credit check so your credit score won’t be affected .
• No need to put up collateral to qualify .
• Approval is based off your ability to repay the loan .
• Simple and affordable payment structure .
• Tons of private lenders make it a borrower’s market .

One characteristic of bad credit loans is that they will generally be expensive. This is because lenders charge higher interest rates to borrowers with bad credit than they do to borrowers with good credit.

How do bad credit loans work?

In a nutshell, when a lender reviews an application for a borrower with poor credit, they’ll either deny it outright or approve it, but with a higher interest rate or longer term. This is because they look at those borrowers as higher risks than one with good credit. Yes, you’re being charged more money than someone else simply because you have bad credit. Is that fair? No, but that’s how the lending industry works.

Lenders balance out that higher risk of funding a loan for someone with poor credit history with higher interest rates. Typically, people with bad credit have a history of not paying their bills on time, or not paying them at all. They’re basically trying to recoup the initial loan as fast as they possibly can before the borrower starts missing payments. Again, is this fair? No, but we don’t work that way.

At kingofkash.com, bad credit loans work exactly the same as our personal loans. We treat every potential buyer exactly the same and give you the best possible interest rate we can.

So what is a good credit score and what is a bad one? Generally, a FICO score below 630 is considered bad. You can also get a free credit score through sites like CreditKarma.com and Experian.com.