The need for a cash injection is not exclusive to people with poor credit ratings. Everyone can do with a few thousand extra in their wallets, whether to pay for college fees, clear a credit card debt or pay for a vacation. The problem is when the sum needed gets lenders nervous. But personal loans for people with bad credit solve that problem.
There can be any number of reasons behind the need of a relatively large sum of money – more than $5,000, for example. But an applicant must show that they can afford the loan, and meet repayments. Only then will a lender feel confident and getting loan approval become a strong possibility.
While it is true that traditional lenders typically set poor terms for bad credit borrowers, there is a variety of alternative lending options open to providing a sum of $5,000 or more. Indeed, even large personal loans can be accommodated, and at affordable terms.
Students Have Lending Options
Paying college tuition fees and living expenses can be a huge challenge for the college-goer. In fact, students are always in need of extra funds to finance college living. With no income, it can be very hard to get the funding necessary. Thankfully, there are personal loans for people with bad credit specifically designed for students.
These loans allow students to pay their fees and keep themselves housed and fed, but without burdening them with immediate repayments. In fact, repayments are delayed until after graduation. Also, getting loan approval is pretty easy once the applicant proves he or she is a student and is in need of financial assistance.
But like any large personal loan, the debt will need to be paid eventually. Once graduation comes, the pressure to pay begins – though it is possible to refinance these loans if the pressure is too much.
As personal loans for people with bad credit go, the best loan option is often closer to home. Approaching a member of the family for a loan can provide the most cost-effective solution to the need for extra cash. Usually approval is all but certain, with the only concern being whether or not a family member has the money on hand to lend.
Of course, getting loan approval is not the only concern, with family members still expecting the loan to be repaid. This means a repayment schedule will need to be agreed and signed up to, ensuring there is no confusion over the issue. And because it is a family loan, there is often no interest charged on the deal.
Still, this kind of loan does rest on the idea that a family member has the funds to spare. Perhaps $5,000 is no big deal, but large personal loans can sometimes be too much for them to source.
In terms of interest rates and loan limits, payday loans are not the best option. But there is no denying that as a source of fast emergency funds, they are hard to beat. They are also arguably the most accessible personal loan for people with bad credit, with credit scores ignored and approval resting on income only.
However, besides the very high interest rates that are usually charged (sometimes 35%), they are also limited to $1,500. This means they are not enough to handle any major debts. A series of loans may be necessary to make up the required sum, but getting loan approval on so many deals can prove very expensive.
It may be possible to get a larger sum, and repay over a 90-day period rather than the normal 30-day term. However, this is also likely to be very expensive. And with no large personal loan available, applicants only have the speed of this option to fall back on.