The pace of capital spending picked up yet again in January, rising 1.8% for the month and 8.0% over the past 12 months. Spending is now 8.7% above its prepandemic level, and new orders are 9.7% higher. Purchases of machinery are robust, as are computer sales. Even though many uncertainties about the economy’s progress remain, businesses are apparently deciding to push ahead with expansion plans that had been on hold, in order to be prepared for the eventual recovery. However, surveys indicate that large firms are more enthusiastic than small firms at this time.
Likely beneficiaries of the spending binge include makers of industrial robots and 3D printers. Robots remove the need for worries about physical distancing of the workforce. And 37% of U.S. assembly plants plan to invest in 3D printers, a record high. Interest is also high in collaborative robots, which work in close contact with humans instead of as stand-alone ‘bots. 31% of assemblers are currently using the technology or plan to within the next year, and 17% within two to three years.
A boost for purchases of oilfield equipment seems likely, now that the price of West Texas Intermediate crude oil has surpassed $60 per barrel, its highest level since the beginning of 2020. The number of active drilling rigs has been on a steady upward path since the beginning of October.
Everyone needs extra money from time to time, and this doesn’t change when you have bad credit. Unfortunately, your options become much more limited when you have bad credit. This makes it difficult to qualify for a loan, even when you need it to cover a financial emergency.
Whether you’re wondering how to get a car loan with bad credit, pay hospital bills, or even qualify for a mortgage with bad credit, we’ll show you how to improve your credit score and get your finances back on track.
Not only will you find out how improving your credit score can save you money on your next loan, you’ll also learn steps you can start taking today to start building your credit.
How does bad credit affect your ability to get a loan?
Before you start looking for a loan, it’s important to get an accurate understanding of your credit score. Most lenders use the FICO scores, which ranges from a low of 300 to a high of 850. A “bad” credit score is typically defined as lower than 629.
If you want to know your exact number, you’ll have to purchase that information from FICO. But if you simply want to see what kind of derogatory items are on your credit report (and potentially fix them), you can request a free copy of each of your three credit reports.
It’s a good idea to take advantage of this free service every 12 months to check your reports for accuracy even if you’re not actively looking for a loan.
Once you’ve established whether or not your credit score is low, find out the exact impact bad credit can have on your life. Bad credit affects you both financially and emotionally, but the most expensive effect is the type of loan you’re able to get.
Higher Interest Rates
When applying for a loan, the lender will charge you higher interest rates for a poor credit score. That’s because your lender sees you as a greater financial risk, so they charge higher rates in case you default on the loan.
Higher interest rates can really add up over the life of the loan. Keep reading to find out exactly how much.
Even worse than getting a high interest loan, you may not qualify for a loan at all if your credit score is too low. If the loan is for something non-essential, then this may not be that big of a deal.
But it can significantly affect your well-being if you have serious financial needs, like car repairs or medical bills. At this point, some people decide to turn to “no credit check” lenders who offer predatory products like payday loans.
Though short-term, these loans have extraordinarily high APRs and often lead people into a cycle of never-ending fees for what started off as just borrowing a few hundred dollars. Luckily, there are many ways to avoid ending up in this situation.
Where can you get a loans for bad credit?
If you do have a poor credit history, some reputable lenders might be willing to offer you a loan. Just remember, you’re going to be paying a lot of interest on top of the amount you borrow.
Check Out Our Top Picks:
Best Personal Loans for Bad Credit
It’s always good to check with your local bank or credit union, although they are likely to have stricter lending standards and a slower origination process. If you have an existing relationship with a bank or credit union, they may be willing to help you out.
Many online lenders offer quick approval and funding, even for borrowers with a low credit score. Just be sure to do your research to make sure the company operates a legitimate business.
Before taking out a personal loan from anyone, check to see what kind of reviews that company has received and what its Better Business Bureau rating is.
Bad Credit Lenders
Here are a few online lenders that offer bad credit loans:
Avant is a major online lender offering bad credit loans that only requires a minimum credit score of 580.
MoneyMutual is a lending aggregator that offers short-term loans to borrowers with low credit. You do need to have a consistent monthly income of at least $800 to apply.
CashUSA partners with lenders offering loans to people with bad credit between $500 and $10,000. The credit and income requirements are flexible, but the interest rate could be pretty high.
BadCreditLoans.com is a lending marketplace for borrowers with bad credit who need quick access to cash. You could receive up to $10,000 with loan terms up to 60 months.
PersonalLoans.com is another lending marketplace that offers personal loans to borrowers with poor credit. You will need to prove that you have a monthly income of at least $2,000 to qualify.
OneMain has physical locations in addition to its online presence and actually has no credit score minimum. The company says its average customer has a credit score between 600 and 650. Don’t get too excited, though – your APR could be as high as 35.99%.
Things to Know About Applying for a Bad Credit Loan
If you do decide on getting a bad credit personal loan, keep a few things in mind so you don’t damage your credit scores even further. First, limit your number of loan applications.
Every time you apply for a loan, the lender makes an inquiry on your credit report. This lowers your credit score anywhere between one and five points depending on your situation.
That might not seem like a lot, but it could affect your interest rate if you’re on the border between “bad” and “fair” credit. Plus, many lenders view a large number of inquiries as a risk factor, especially if they’re all made within a short period of time.
Thoroughly research potential lenders in advance and see if they offer to make a soft pull on your credit rather than a hard one. That way you can compare interest rates without hurting your credit even more.
Going through a lending marketplace is a good way to limit your credit inquiries as well. With just one application, you’ll receive quotes from multiple lenders that are willing to work with you.
How much extra interest should you expect to pay on a loan with bad credit?
Even after getting approved for bad credit loans, there’s no getting around the fact that it’s going to be an expensive decision. Just how expensive depends on the terms and conditions of the loan.
On top of your interest rate, your lender may also charge an origination fee. Unfortunately, this is a pretty universal concept, so there’s not much you can do to avoid paying it.
The origination fee is usually charged as a percentage of your loan amount, so – just like interest – the more you borrow, the more you pay. You don’t have to come up with the cash upfront; instead, the fee is deducted from your loan.
Make sure you account for this deduction in your loan request. For example, if you need a $20,000 loan and there is a 3% origination fee, be sure to request $20,600 because 3% of $20,000 is $600.
Annual Percentage Rate
A helpful tool in determining the best interest rate and applicable fees is the loan’s annual percentage rate or APR. This number helps you compare offers that have different rates and fees to see which is better on an annual basis.
However, APR does not account for the loan term, which is the amount of time it will take you to pay off your loan. A loan may have an extremely low interest rate, but if it takes 10 years to pay off, you might actually end up paying a lot more in interest.
There are a lot of variables to consider when figuring out how much interest you’ll be paying. Let’s look at an example to help put these facts and numbers into context.
Auto Loan Calculator
Let’s say you want to figure out how to get a new car loan with bad credit. By using an online calculator, you can determine if making the purchase now is worth paying the extra interest compared to fixing your credit first.
According to Experian, the average length of a new car loan is 67 months and the average loan amount is $28,711. For simplicity’s sake, let’s say you get a 60-month (five year) loan for $28,000. Here is how MyFICO estimates different credit scores to stack up in the same scenario.
The differences in the amount of interest paid over the life of the loan are jaw-dropping: a person in the lowest range pays nearly $9,500 more than someone in the highest range. So you wouldn’t be paying $28,000 for that new car, you’d actually end up paying almost $37,500.
Bumping your credit score up just 31 points from a 589 to a 620 could save over $4,600 in this scenario. Think of how many paychecks that adds up to before you decide on getting a loan with a bad credit score.
Total interest paid
720 – 850
690 – 719
660 – 689
620 – 659
590 – 619
500 – 589
Should you fix your credit before applying for a loan?
If you want to potentially save thousands of dollars on your next loan, then yes, you should consider fixing your credit before you apply. While some credit components take time to improve, there are many actionable steps you can take right now to improve your credit scores.
It’s always better to get a head start on the process rather than waiting for a financial emergency. If you don’t need the money right away, take the time to fix your credit now so you can save big when you are ready to borrow.
Here are five steps you can take right away to fix bad credit:
1. Dispute any errors on your credit report
Before you attempt to repair your credit, you want to know what you’re dealing with first. So the first place to start is by reviewing and disputing any errors on your credit report. And checking your report will give you a good idea of where you can begin making improvements.
2. Start making your payments on time
One of the easiest ways to raise your credit score is by making your monthly payments on time. Your payment history counts for a significant portion of your credit report, so if you struggle to make your monthly payments on time, your credit scores will take a hit.
And you may be surprised to learn that this applies to more than just lending products. It also includes credit cards, personal loans, home loans, utilities, and even your cell phone bill. Once you have that under control, start paying down any existing credit card debt.
3. Lower your credit utilization ratio
Your credit utilization ratio accounts for 30% of your credit score, meaning you’re not just judged on the amount you owe, but also on the amount you have borrowed compared to the amount you are allowed to borrow.
If your credit cards let you borrow up to $10,000 and your balance is $4,000, your credit utilization ratio is 40%. Ideally, your credit utilization ratio should be below 30%, so try to make extra payments until you can reach that ideal range.
4. Consider using a credit repair service
If you’ve already taken the steps we outlined above with minimal success, then you may want to consider hiring a professional. A credit repair service can dispute any negative items on your account and help improve your credit score faster than if you’re doing it on your own. Here is our top choice for a credit repair service.
By law, an item must be removed from your report if the creditor can’t verify it within 30 days. By having a tireless advocate on your side, you’ll make sure your current and past creditors are following the law. They will help you make sure your credit history has been updated to accurately reflect your financial history.
5. Show a lender can you repay the loan
Once you’ve put in the work to raise your credit score, it can help to look for ways to show an online lender, bank, or credit union that you’re able to repay the loan. Providing proof of income can give a lender more peace of mind and demonstrate that you’re financially capable of repaying the loan.
If you don’t have any proof of income and your credit score is still lower than you’d like, you can consider applying with a creditworthy co-signer. Ideally, this will be someone who has a good credit history and can vouch for you with your lender.
However, you should only use a co-signer if you’re certain you can repay the loan. If you default on a loan, the bank will go after your co-signer, which will put their financial future at risk.
How can you maintain your credit score once it’s fixed?
After taking the time and effort to raise your credit score, make sure you do everything in your power to keep it up — or get it even higher!
You might not be looking for another loan or line of credit at the moment, but you never know what your financial future will look like. Perhaps you rent an apartment now, but want to buy a house further down the road.
Getting a Mortgage
It’s hard to figure out how to get a mortgage with bad credit, so do your best to make sure you take care of your credit now. That means paying all your bills on time, setting aside cash for emergency savings, and not racking up unnecessary debt.
Remember, most infractions stay on your credit report for up to seven years, so the financial decisions you make now stick with you for a long time.
Renting an Apartment
Plus, think of all the ways poor credit affects your life outside of getting a loan. Many landlords run credit checks on prospective tenants, so it can be difficult to rent an apartment with bad credit.
Potential employers also sometimes run credit checks on job applicants to see how they handle their money. Why? They think that if you’re not responsible in your personal life, you probably won’t be responsible in your work life.
So bad credit not only affects your spending power, it affects your earning potential as well. Keep every door open by making a conscious effort to continually improve your credit. It would be a huge waste of time and effort to give up on all the progress you just made. Do yourself a favor and consciously manage your money going forward.
It certainly is possible for people with bad credit to get a loan, but that doesn’t mean it’s the best decision for you. Analyze just how urgent your financial needs are. Then, decide if you can wait a while to improve your credit before taking out a high-interest loan.
A reputable credit repair service can help you aggressively put your credit score on the fast track to improvement. Check out our credit repair reviews page for a list of reputable credit repair companies that can get you started today.
June 8, 2019Posted By: growth-rapidly Tag: Buying a house
Many millennials start the home buying process without a real understanding of what it takes be a homeowner.
In fact many of them don’t even know the many upfront costs when buying a house — including coming up with a down payment, moving costs, closing costs, renovating costs, and so many others.
They think that if they have a sizable down payment and a stable job, the hard yards are over. Well, not quite…
Wondering how these mistakes can affect your overall financial plan? Talk to a local financial advisor.
That lack of knowledge can lead them to make costly mistakes, including paying thousands of dollars in loan interests, defaulting on their home loan, or going bankrupt. Here are some of the biggest mistakes millennials make when it comes to buying a house — and what can be done instead.
Check out: 5 Signs You’re Not Ready to Buy a House.
1. Not understanding the importance of a good credit score.
One of the most important things a mortgage lender looks at when deciding to pre-qualify or qualify you for a mortgage loan is your credit score.
Yet, many millennials don’t know the importance of maintaining a good credit score. Lacking that fundamental knowledge could cost them a lot. One is that you will have a hard to get qualified for a loan.
Second, even if a mortgage lender offers you a mortgage loan, you will likely get a high mortgage rate. A high mortgage rate can cost you thousands of dollars in interest – money that you could contribute towards your retirement savings.
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To avoid this mistakes when buying a house, millennials should first figure out their credit scores through a free monitoring service like MyFreeScoreNow. A good credit score is around 730.
Once you have an idea of what your credit score is through your credit report, take steps to improve it. One way to raise your credit score is not to max out your credit limit.
Maxing out your credit cards can hurt your credit score significantly. So keep your credit utilization rate under 30 percent.
Another way to improve your credit score is to pay your bills on time. Payment history accounts for 35% of your overall credit score. So it’s very important to pay your bills promptly.
Check out: How To Raise Your Credit Score to 850.
2. Not understanding how much down payment is enough.
A down payment on a house is the single most important factor when it comes to buying a house. Unless you are so wealthy that you can buy a house with outright cash, you will need to come up with a down payment.
The recommended down payment is 20% of the home purchase price. But many first time home buyers can be qualified for a FHA loan, where the down payment is 3.5%.
Feeling Overwhelmed With Your Finances?, You have options and there are steps you can take yourself. But if you feel you need a bit more guidance, simply speak with a financial advisor. SmartAsset’s free tool matches you with fiduciary advisors in your area in 5 minutes. If you are ready to meet your goals, get started with Smart Asset today.
However, the disadvantage of putting less than 20% is that you will have to pay Private Mortgage Insurance (PMI). A PMI is extra fee added to your monthly mortgage payment.
Another disadvantage is that it will take you longer to pay off your mortgage. And your monthly mortgage payments will be much more.
One way to not have to worry about a PMI is to save for a 20% down payment before starting the home buying process. Saving for a down payment should not be that hard if you have a savings strategy in place.
See: What is a Typical Down Payment on a House?
Taking out a mortgage loan to purchase a house is the most expensive financial decisions you can ever make in your life. So it’s important to have the best mortgage rates possible so you don’t end up paying thousands of dollars in interest over the life of the loan.
Yet, most millennials only speak with one lender when buying a home. That is a big mistake. When you speak with one lender, you don’t know what other mortgage rates are available to you. A good mortgage rate means less interests. So not speaking with multiple lenders is one of the mistakes to avoid when buying a house.
4. Not knowing other upfront costs associated with buying a house
You might think that just because you’ve found a home and you have been approved for a loan, that your hard work is over. Well, not quite. In addition to coming up with a down payment, there are several other upfront costs when buying a house.
There are inspection costs. Before you buy a house, it’s always a good idea to inspect the house for defects. In fact, it is mandatory. Lenders will simply not offer you a loan unless they have seen an inspection report.
There are loan application fees. Some lenders may charge you a fee for applying for a loan. This fee typically covers tings like credit check for your credit score or appraisal.
There are repair costs. Unless your house is perfect from the very first time you occupy it, you will need to do some repair. Depending on the condition of the house, repair or renovating costs can be quite significant.
There are moving costs. Depending on how far you’re moving and/or how much stuff you have, you may be up for some moving costs.
So avoid these mistakes when buying a house, and your home-buying experience should go as smoothly as possible.
MORE ARTICLES ON BUYING A HOUSE:
10 First Time Home Buyer Mistakes to Avoid
How Much House Can I afford
5 Signs You’re Better Off Renting
7 Signs You’re Ready to Buy a House
How to Save for a House
Not All Mortgage Lenders Are Created Equally
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With interest rates steadily climbing since after the recession of 2007, it’s important to be aware of what is a good interest rate when you’re planning on financing, whether it’s for a car, a home or your education. Take a closer look at what’s happening with interest rates in 2019 below and how you can make sure you’re getting the best rate possible for your situation.
Knowing What Is a Good Interest Rate
Being able to tell what is a good interest rate depends on the type of loan you’re thinking about getting. Here are some of the average, high and low interest rates for the most popular types of loans.
According to Federal Reserve data, the average rate on all credit cards as of May 2019 was 15.13%, while the average rate charged to cardholders with a balance was 17.14%. But credit card rates can vary widely. According to U.S. News & World Report, average APRs for rewards-style credit cards ranged from 16.8% to 25.24%, as of August 1, 2019.
Lower rates than these are available, but you’ll need great credit to get them. Lowering your interest rates by just a couple of points can be helpful when you’re trying to make a dent in debt. If your current credit card rate seems high, consider transferring the balance to one of your existing cards with a lower rate or a new one with an introductory 0% APR offer. Just watch out for balance transfer fees that can total 2–4% of the transferred amount.
According to the Federal Reserve, the average 48-month new car loan rate was 5.35% as of May 2019. The National Association of Federal Credit Unions puts the average 5-year new auto loan rate from banks at 4.86% versus 3.69% through credit unions, as of August 2019. For a 5-year used car loan from a bank, the highest interest rate was 12.75% and the lowest was 2.69%.
Is 4.75% a good interest rate?
For an auto loan, 4.75% is probably a good interest rate. That’s under the current 5-year new auto loan average rate for banks. But if you have excellent credit, you may be able to get even lower if you shop around.
Caroll Lachnit, features editor and consumer advice expert for Edmunds.com, recommends consumers shop for financing before they shop for their car. Otherwise, you could fall victim to the yo-yo financing trap where you “think that you’ve done the deal but then you find out (the dealer) couldn’t do the deal.” So, what is a good interest rate for a car? As of August 2019, anything under 5% is going to be a good auto loan rate, and anything under 4% would be excellent.
If your current rate is higher than this and you have decent credit, you may be able to refinance to a lower rate. Just make sure that by doing so you reduce the interest rate without increasing the remaining term on the loan. Don’t refinance for any longer than the time left on your loan.
Unlike other types of debt, you can’t shop around to find out what is a good interest rate for federal student loans. That’s because these rates are set under the federal Direct Loan program. As of July 2019, the interest rate for direct subsidized and unsubsidized loans at the undergraduate level was 4.53%. Graduate-level unsubsidized loans have an interest rate of 6.08%, and direct PLUS loans have an interest rate of 7.08%.
Is 4.5% a good interest rate?
For undergraduate students, 4.5% is a good interest rate for a federal student loan. However, it may be hard to come by unless federal rates go down. “For new loans, there is only one way to reduce the rate and that’s to sign up for auto debit,” says Mark Kantrowitz, publisher of Finaid.org. In other words, you may be able to get a small reduction in your interest rate if you agree to have your payments automatically deducted from your bank account.
The good news is that your credit score won’t be a factor in determining the rate you pay for a federal student loan. However, “PLUS loans require that you don’t have an adverse credit history (no current delinquency of 90 or more days and other negative items in the last five years),” Kantrowitz explains.
What is a high interest rate for a private loan?
Many students have to look to outside funding to afford college, and private student loan interest rates can vary widely depending on the term and amount. According to the National Association of Federal Credit Unions, bank interest rates for a three-year unsecured loan range from 2.9% to 18.86%, with an average of 9.74%, which means anything over 10% is likely to be considered high.
For these loans, borrowers are clustered into tiers based on credit scores, says Kantrowitz. But you can’t find out the credit score ranges for those tiers in advance because that’s considered competitive data. “You have to apply and get a credit check before they will tell you how much they will charge,” he warns, adding that “the best rates go to about 5% of borrowers, while two-thirds get the worst rates.”
The best strategy is to max out federal loans first and shop around when it comes to private loans. And make sure to apply in a short period of time. “When lenders access your score, it creates an inquiry on your credit report, which can hurt your credit score. But certain types of inquiries are grouped together, so you can have any number of inquiries of a certain type, and they will only count as one, and student loans tend to fall into that category,” says Barry Paperno, former community director for Credit.com. “So, it’s a good idea to do your student loan shopping in a short period of time—ideally within a 14-day period but definitely within a 45-day period.”
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The National Association of Federal Credit Unions lists the average 30-year fixed mortgage rate at 3.937% through credit unions and 4.072% fixed through banks as of August 2019. Mortgage rates will vary depending on lender and loan terms, with average bank interest rates ranging from 2.5% to 8.75% for a 15-year fixed mortgage, for example.
Mortgage rates can be very confusing because so many factors come into play. “First, mortgage rates vary every single day. They fluctuate based upon many factors inside the United States and worldwide,” says Joseph Kelly, president of ArcLoan.com. “Secondly, mortgage rates vary based upon ‘cost.’ On any given day, there are a variety of interest rates available where the borrower may get a lower rate by paying additional cost or higher rates, which can even include a lender credit to the borrower.”
If you’re taking out a 30-year mortgage for $200,000 with $4,000 in closing costs, you might be able to choose between a rate of say 3.5% with closing costs or 3.875% with no closing costs. Kelly explains, “In the case of the 3.5%, the lender is giving the borrower a ‘credit’ for the closing costs. Is it worth paying approximately $4,000 to save an additional $69 per month in this example? That depends on how long you expect to be in the property and what you expect interest rates do in the next few years.”
It’s not always an easy decision. If you’re shopping for a new mortgage loan or to refinance your current loan, be sure to ask about closing costs as well as the interest rate and work with a reputable lender who can explain the differences and walk you through the process.
How to Get the Best Interest Rate
Getting the best interest rate on a loan often comes down to your personal credit history and how much time you have to shop around. Here are four tips to help you get a good interest rate.
1. Check Your Credit
Simply put, your credit score matters for most interest rates. Lenders develop tiers based on credit scores, and those with great scores typically snag the best deals on auto loans, mortgages, credit cards and private student loans. FICO scores above 760 usually get borrowers the best rates, but every lender sets its own standards. You can sign up to get your free credit score and reports at Credit.com.
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2. Watch Out for Fees
While a low rate may be appealing, the savings can easily get eaten up with fees—especially if the difference between two lenders’ rates is less than 1%. James Royal, former vice president and director of marketing for Informa Research Services, Inc., recommends considering the fees just as much as the interest rate.
3. Go for a Fixed Rate
When you can, get a fixed-rate loan rather than one with a variable rate that can change in the future. Interest rates are still trending higher, which makes locking in a low rate now a smart strategy. However, this may not be possible for every loan type. Credit cards, for example, usually offer only variable interest rates.
4. Comparison Shop
For most loans, what is a good interest rate is relative, which is why it’s important to shop around for rates online and with local brick-and-mortar stores. “Do your homework online,” says Royal. “Then talk to your financial institution. A lot of banks are trying to offer incentives in order to change consumer behavior, such as having your mortgage at the same place where you have your checking account,” he explains.
And always make sure to check with your local credit unions in addition to big-name banks. Credit unions are often able to offer better rates or more flexible loan terms and approvals than larger financial institutions.
The following is a guest post by Eric Lindeen, of Anna Buys Houses.
The second quarter of 2020 marked the highest U.S. mortgage delinquency rate (reported as 60-days past due) since 1979. Amidst the chaos of the pandemic, federal and state governments have made efforts to protect against the financial strain U.S. consumers are enduring—including mortgage payment forbearance of foreclosure.
What Is a Forbearance?
Forbearance is the postponement of mortgage payments, or the lowering of monthly payments for a specified time period; it’s not loan forgiveness. Repayment terms are negotiated between the borrower and lender. Mortgage forbearance is one tool to help protect homeowners from foreclosure due to temporary hardships, such as a job loss, natural disaster, or pandemic. Some homeowners may opt for strategic forbearance, meaning they proactively enter a forbearance agreement just in case they lose their ability to make their mortgage payments.
As of October 25, data from the Mortgage Bankers Association (MBA) reports that approximately 2.9 million U.S. homeowners are currently in forbearance plans. That number represents 5.83% of servicers’ portfolio volume. MBA data also shows that nearly 25% of all homeowners in forbearance plans have continued to make their monthly payment (perhaps an indicator of the use of strategic forbearance).
How Do Forbearance Plans Work?
Mortgage payment forbearance programs have come at a time when many Americans are losing their livelihood and others fear the potential fallout from the health and economic crisis. Not all forbearance plans are created equal. Therefore, it’s critical to understand how different plans are structured to protect your financial health and credit.
The Coronavirus Aid, Relief and Economic Security (CARES) Act is one measure enacted to provide relief to consumers facing hardships due to the impacts of the coronavirus. One provision of the Act allows mortgage payment forbearance and provides other protections for homeowners with federally or Government Sponsored Enterprise (GSE) backed or funded (FHA, VA, USDA, Fannie Mae, Freddie Mac) mortgage loans.
If you have a federally or GSE-backed mortgage, no documentation is required to request forbearance, other than an assertion that you are facing a pandemic-related hardship. Borrowers are entitled to an initial forbearance period of up to 180 days. If necessary, an extension of an additional 180 days may be requested. Federally backed mortgages are protected against foreclosure through December 31, 2020.
Recently, the foreclosure moratorium was extended yet again to at least March 31, 2021 for GSE-backed loans (Fannie Mae and Freddie Mac). Be sure you understand who owns your loan and the terms of your loan as these deadlines approach. Extensions are likely to continue to help borrowers keep their homes and lenders navigate the constant uncertainty that is 2020.
The CARES Act amended the Fair Credit Reporting Act (FCRA) with a provision that when a lender agrees to forbear an account of a consumer impacted by the pandemic, the consumer complies with the terms of the forbearance. Then, the mortgage issuer must report that account as current to credit reporting agencies.
How Your Credit Factors into Forbearance
On paper, knowing that your credit won’t be affected by forbearance seems like a good deal. There’s an important distinction here. Your loan doesn’t need to be current to qualify for forbearance under the CARES Act. However, any delinquencies on your account prior to entering a forbearance plan will impact your credit report. Make sure that your loan is current, and being reported as current to the credit bureaus, before you agree to a forbearance of foreclosure.
What about Private Mortgages?
Around 30% of single-family mortgages are privately owned. Many private banks and loan servicers have voluntarily implemented relief measures that don’t fall under the same protections of the CARES Act. Terms vary by institution and state of residence. And relief plans may not be structured in the same manner as federally-backed and funded loans.
For example, borrowers with private loans may be required to pay back all missed payments in a lump sum as soon as the forbearance period ends. Lump sum payments are not required for GSE-backed loans. Additionally, if modifications are made to a privately funded loan, the new terms could impact your credit score depending upon how the lender reports the status of your loan to the credit bureaus.
The good news is that the three major credit bureaus (i.e., Equifax, Experian, and TransUnion) are providing free weekly online credit reports through April 2021. Be sure to check these reports to ensure that the new terms of your loan are being reported as “paying as agreed” and not reported as late. Credit.com also has resources to help check and manage your credit.
It’s also important to understand the terms of your loan. Some homeowners who recently refinanced were asked to sign a form that was quickly described as “new COVID paperwork.” The fine print stated that their new loan was not eligible for forbearance relief measures.
Get matched with a personal loan that’s right for you today.
Mortgage payment forbearance is one tool that can protect homeowners from defaulting on their loan, damaging their credit, and worst of all, losing their home to foreclosure. Key takeaways include, knowing who owns your loan, who services your loan, and what type of protections are available to provide relief if the current economic crisis is impacting you or you fear that it might.
There are proactive steps to protect against foreclosure and determine the right path for your personal situation.
Retail sales jumped 5.3% in January, as $600-per-person stimulus checks hit pocketbooks early in the month. All major categories of spending rose. The biggest beneficiaries: Department stores, up 23.5%; home furnishings, up 14.7%; electronics, up 12.0%; nonstore (mostly e-commerce), up 11.0%; sporting goods and hobbies, up 8.0%; and restaurants, up 6.9%.
More stimulus is expected: The current Democratic stimulus proposal includes an additional $1,400 per person, though with income restrictions. With COVID-19 infections dropping this month, sales should continue to be strong as restrictions are eased and more people feel comfortable shopping or eating out in-person. The recent winter storms should ding February sales in Texas and certain other states, however.
Restaurants finally caught a break in January, doing better than expected despite a continuing pandemic surge. Falling COVID-19 infection rates in February also bode well for restaurants, though likely not until after the current winter storms subside.
Even though November and December sales showed monthly declines, holiday sales were still above last year’s level. Holiday sales of in-store goods were 4.9% above last year, though only 3.0% higher if building-store sales are excluded. E-commerce sales were roughly 26% higher than last year. Of course, not all stores have done well. Clothing, electronics and department stores have a lot of ground to make up to get back to last year’s sales level.
Bad credit is not something that can be solved overnight. Although you can work to repair your credit, progress usually takes time. Sometimes, you do not have time to wait for your credit score to improve because you need a loan right now.
Life has a habit of throwing unexpected expenses in your path such as an unexpected medical bill or car repair. Whatever has you seeking a personal loan, it is likely something that you need the money for soon. It might be ideal to wait for your credit score to improve but that is not always possible.
Luckily, there are many online lenders that are willing to provide bad credit personal loans for $5,000 or more. Let’s take a look at some of the best lenders who provide personal loans to people with bad credit.
Best Personal Loans for Bad Credit
You can absolutely secure a personal loan with bad credit. However, you should keep in mind that you will likely not receive the best terms. With bad credit, lenders are likely to charge you a higher interest rate for the loan. Make sure you absolutely need a personal loan before moving forward.
CashUSA serves as your one-stop shop to connect with online lenders that offer personal loans with bad credit. With a quick request process, CashUSA will work to connect you to a lender that is willing to work with you.
CashUSA lenders provide personal loans with a loan amount of $500 to $10,000. APR can vary widely based on the individual lender and your credit score, but it can range between 5.99% to 35.99%. The interest rate is variable with terms between 90 days and 72 months. Funds are deposited directly into your bank account.
Full review of CashUSA
As the name suggests, BadCreditLoans.com is a place to find unsecured personal loans if you have bad credit. BadCreditLoans.com is not a direct lender but the site will connect you to lenders that are willing to work with you.
Lenders in the BadCreditLoans.com network offer loan amounts up to $10,000. Although most of the personal loans through these lenders are smaller than $10,000, it is possible to obtain the full $10,000.
The APR on personal loans can range between 5.99% and 35.99%. Interest rates are variable but generally on the shorter side, starting at just 3 months. You can get the money deposited in your bank account as soon as the next business day.
Full review of BadCreditLoans.com
PersonalLoans.com works to connect borrowers with personal loan offers between $500 and $35,000. If you have bad credit, then you should not expect to be approved for the maximum $35,000 loan. Although not everyone is able to qualify for the maximum amount, every applicant can request the amount they are seeking.
The APR on personal loans ranges from 5.99% to 35.99%. The APR you qualify for will be largely based on your credit score. One big benefit offered by PersonalLoans.com is the flexibility of repayment terms which range from 6 to 72 months. You’ll have the ability to choose the timeframe you’d like to repay the loan.
A final benefit of these personal loans is that there is no prepayment penalty. You’ll be able to repay your debt as quickly as you’d like without any repercussions.
Full review of PersonalLoans.com
Although Avant typically works with borrowers of average to above-average credit, it is still a company worth looking into. You do not need good credit to apply for an Avant personal loan.
The company offers personal loans with loan amounts between $1,000 and $35,000 with APRs that range from 9.95% to 35.99%. Many Avant borrowers are using the personal loan as a way to consolidate their debts. If you are using this strategy to rebuild your credit, the Avant may be the right choice for you.
Full review of Avant
You can obtain a personal loan from OneMain Financial with a loan amount of between $1,500 and $25,000. However, the company has set slightly different limits for each state, so you will need to confirm your state’s limit with your local office.
As an applicant, you’ll have the option to pursue a secured or unsecured personal loan. If you have poor credit scores, then a secured loan may be the better option.
The interest rates will vary greatly based on your credit history but you can expect an APR range from 25.10% to 36%. The maximum loan term we’ve seen in 60 months. Make sure you ask about the origination fee as it varies per state.
One thing to note about these personal loans is that they will need to be executed after communication with a loan officer. That means you’ll need to make an appointment with a loan officer and talk to them in-person or over the phone.
Full review of OneMain Financial
This Chicago-based lender works with borrowers across the country to provide bad credit personal loans. The company offers unsecured personal loans with a loan amount of $1000 up to $10,000.
NetCredit evaluates each loan application on a case-by-case basis. Your loan offer will likely vary greatly based on your credit score and the state you live in.
Since the company works in many states, the APR range is extremely wide, from 36% to 155%. You’ll need to check out NetCredit in your state to better understand what this company can offer you. There may also be an origination fee depending on where you live.
Full review of NetCredit
A personal loan can seem difficult to obtain at a bank or credit union if you have bad credit. However, the lenders above can help you get approved for a loan to fund whatever life throws your way.
While it is possible to obtain a personal loan with a poor credit score, it may not be the best financial move, especially if you want to use it to consolidate credit card debt. It is more than likely that you will be offered unfavorable loan terms and high interest rates, which could cost you thousands over the course of your loan.
You could be using those funds to pay down other debts to improve your credit score. With a higher credit score, you’ll be able to obtain more favorable personal loan terms in the future. With that said, bad credit installment loans are still usually a better option than payday loans. Just make sure you can afford the monthly payments before you move forward with a personal loan.
Before applying for short-term loans, think of other ways that you could fund the immediate emergency. You could sell belongings, pick up a side hustle, or find a way to fix the problem yourself. If you are interested in rebuilding your credit score, then take advantage of our free DIY guide.
Shaq became famous as a basketball player, a very large basketball player! He was 7-1 and was well over 300 pounds when he was playing in the NBA. Not only is he one of the best basketball players of all time but is a real estate investor as well. He has also been a major part of many other businesses like Ring doorbells, Five Guys Franchise, and he was an early investor in Google. After leaving the NBA, he has become even more involved in real estate and been a part of some very large deals! It is hard to find the exact information on what Shaq has done real estate-wise, but he has given hints over the years in interviews on how he started and what he is involved in. From what I could find out he started by flipping houses with a partner in New Jersey. He has also been involved in low-income housing in Denver and done deals in Florida as well. He currently is focusing on large projects in the New Jersey area where he spent time as a kid.
Where did Shaq live growing up?
Shaq was born in New Jersey and his father was a basketball player as well. However, his father had drug problems and was never a part of Shaq’s life. Shaq did have a stepfather who was in the army and Shaq ended up living in Texas and Germany as a kid because of his stepfather’s career. Shaq ended up going to high school in San Antonio and leading his team to a state championship. Shaq was a always big kid. He was 6-6 when he was 13! I was 6-1 when I was 13, but I stopped growing at 13 and Shaw did not.
It is important to know where Shaq grew up because it impacted his real estate investing later on. He was not a real estate investing just to make money. As he said onCNBC Make It:
“I don’t invest in companies just to try and get the big hit,” “I [invest] because I know it’s going to change people’s ideas… change people’s lives.”
How did Shaq blow his first million?
Shaq had an amazing interview with Daymond John (The Shark Tank) about how he spent a million dollars the first day he made it. He spent $150,000 on a Mercedes for himself, then his dad wanted a car so he bought him one, and then he bought his mom a $100,000 car. He bought jewelry, suits, CD changer, went to Vegas, etc. Then his banker called him in to warn him about his spending. Shaq had no idea about taxes and that he had spent the entire million without realizing it!
From that point on, he made sure to take care of his money and learn from those who know about money. He credits Magic Johnson with helping him learn a lot about money and investing it instead of wasting it.
How did Shaq start his real estate investing career?
During Shaquille O’Neal’s long playing career, he earned an estimated $292,198,327! He definitely had a head start as an investor by earning so much money in the NBA. However, he did not start with huge projects although some of the articles you read will have you believe he did. In a 2002 article from the Denver Post about an affordable housing project he said:
“We started buying homes out of foreclosure and paying $10,000 or $12,000 for them, fixing them up, and maybe selling them for $25,000 or $35,000,” Shaq said.”It would be easy for me to develop a housing community around a golf course or buy strip malls, but that’s not how I want my book to go.”
He was talking about Mike Parris, who was his uncle and business manager, and mentioned that he was doing this 4 years ago, which would have been 1998 when he was 26. Shaq started small in his hometown. At the time he would have been playing with the Orlando Magic in Florida.
While he may not have been the one swinging the hammer, he was definitely investing in real estate at a young age.
How did Shaq’s real estate investing evolve?
Shaq started the O’Neal group in 2006 which invests heavily in real estate, but as we know he was involved in investing before that. In the article in the Denver Post from earlier, he was also involved in buying big projects before that as well. In 2002 Shaq said;
“My dream is to own $1 billion a year in affordable housing,”
He started by purchasing a $65 million affordable housing project in the Denver area that eventually cost $100 million after property improvements and other costs were factored in. The project consisted of 1,500 units and the seller would only sell to investors who were willing to keep the affordable housing aspect of the project.
In 2006 his company invested in The Met in Miami which was a highrise with 1,000 units.
He also recently opened an $80 million apartment complex in New Jersey and has plans for another $150 million high rise.
What is a little frustrating is the giant gap you see from 2006 to 2018! it is hard to find much information on the O’Neal group or his real estate investments during that time. There was another project he was involved in Atlantic City, but I could not find out if that project was ever completed. However, he was not just investing in real estate during his career. He has done many things!
What other businesses has Shaq been a part of?
Shaq has said he loves real estate and obviously has been a part of some huge deals but he has done many other things as well! Here are a few of them:
Pre-IPO Google stock: He bought into Google before it even went public.
He started a clothing line
He has owned 17 Auntie Anne’s Pretzels restaurants
He has owned 150 car washes
He has owned 155 Five Guys Burgers and Fries franchises
He has owned 40 24 Hour Fitness gyms
He has been a partner in Las Vegas nightclubs
He has owned a movie theater
He was a partner with Muscle Milk
He was a partner with Vitaminwater
He was a partner with Loyal3
He has released albums with commercial success
He has been in movies and on TV
He is super involved with law enforcement
I am sure I am missing many other things he had done or been a part of! I have no idea how many of these things he has sold or still owns but he has sold many of his investments and business over the years. He is obviously very diversified!
How involved is Shaq in real estate investing?
I have no idea how involved Shaq is or was in real estate. He sounds very passionate about it when he talks about so he could be very involved. However, he has so many other things going on it would not surprise me if he is mostly the money guy and other people find the deals and put together the projects. There is nothing wrong with that as the best investors learn how to make money without doing a ton of work! If Shaq happens to read this and has some more information to add, I would love to hear from you! Mark @ Investfourmore.com
New to peer-to-peer lending? It’s a type of lending that has been around for over 15 years in the U.S. and has continued to grow in that time. It’s a way for borrowers to access competitive rates outside the traditional bank lending model.
It also brings the potential for higher returns to individual investors, often even including those who are non-accredited. P2P lending is a platform meant to cut out the middleman and generally democratize the loan landscape.
On top of that, there are reputable lenders across industries. That means better diversification amongst personal loans, business loans, and even commercial real estate projects.
Let’s jump in and find out how peer-to-peer lending works and who are the best P2P lenders out there today.
How does peer-to-peer lending work?
Peer-to-peer loans take online lending to the next level, directly pairing borrowers with investors in a virtual platform. It’s a unique alternative to traditional banking and often comes with lower interest rates for borrowers and higher yields for investors.
Peer-to-peer lending cuts out a lot of the costs generally associated with taking out loans through a bank. There are no physical branches to support, and staffing is generally a much less substantial expense for P2P lending companies.
How does the peer-to-peer lending process differ from bank lending?
Peer-to-Peer Lending Application Process
From the borrower’s perspective, the application process starts much of the same way as any other loan process. Most P2P lending platforms allow for prequalification that only requires a soft credit pull, giving you an idea of what kind of personal loan you could qualify for and with what terms. At this point, you’re also given a loan grade, which classifies your application as a risk rating.
Next, your funding request is posted on the P2P platform. Investors can review the details of your inquiry, such as what you’ll use your loan funds for, non-identifying aspects of your application, and their anticipated return. If interested, the investor can then commit any amount of funds to your personal loan. Once you reach a certain percentage of committed funding, your loan application moves onto the next level.
You’ll need to submit information to verify your application, like proof of income and any other documentation required by the lender. It then goes to underwriting and you’ll receive an official loan agreement outlining the details of the loan, including rates, terms, and your repayment responsibilities.
After you sign and submit the loan agreement, the loan funds are typically deposited into your bank account within 24 to 48 hours.
Borrowing through P2P Platforms
Because there are extra steps involved in the approval process for a P2P loan, it can take longer to get your funding when compared to other lenders. On the plus side, however, borrowers can often qualify for more competitive rates and terms.
And since there’s upfront transparency to investors regarding each borrower’s credit rating, low credit borrowers may still get the chance to qualify for a loan, even if they’ve been denied by other lenders.
P2P platforms also offer a wide degree of flexibility on loan use. While they’re all different, most generally allow for common funding purposes such as debt consolidation, home improvements, life events, and other major purchases. Your exact need could influence which P2P lender you ultimately choose.
Investing through P2P Platforms
Investors are often drawn to peer-to-peer platforms for the pure fact that returns are often higher than other investment choices. Plus you get to administer as much control as you’d like when managing your portfolio. That’s because you can pick and choose how much you invest at any given moment, in addition to what mix of loan grades you want in your portfolio.
Alternatively, you’re also able to set your investments on autopilot with most of them. You generally can input how you’d like your investments to be distributed. The lender will then automatically disburse your funds to loan requests that meet your criteria.
This frees you up from having to manually review borrower requests, making the process as simple as you want it to be. While P2P lending certainly contains a large degree of risk, some investors may choose to make it a part of their portfolios.
Which is the best peer-to-peer lender?
There are a number of reputable peer-to-peer lenders online today. Here is a breakdown of the best ones to help you choose the right one, whether you’re interested in borrowing or investing.
Prosper is one of the largest P2P lenders, having facilitated $13 billion in loan transactions. That’s a huge amount and they rely heavily on large institutional investors in addition to individuals who back loans for borrowers. Prosper offers loans that can be used for home improvement, vehicles, adoptions, engagement rings, special occasions, and more.
The eligible loan amount is broad, ranging between $2,000 and $40,000 with the choice of either a three or five-year repayment term. Interest rates are competitive and always fixed, meaning you know exactly how much your monthly payment will be for the entire life of the loan.
For investors, Prosper boasts a historical average of 5.5% and the ability to diversify your holdings beyond the typical stocks and bonds. They also pay out monthly returns, so you could potentially earn a steady stream of income. Any returns are deposited straight into your account on a regular basis, so you get quick access to those funds.
Read our full review of Prosper
LendingClub is another major player in the P2P space, helping clients borrow more than $85 billion over the years. The lender advertises a quick funding process with cash available within as few as seven days. Loan options include consolidating debt, paying off credit cards, making home improvements, or covering a major expense. In addition to personal loans, LendingClub also offers auto refinancing and medical debt loans.
The application process is easy for borrowers. You fill out an online form in just a few minutes, including the amount of money you’d like to borrow. If approved, you can review different loan offers that show your potential interest rate, repayment term, and monthly payment amount.
LendingClub works with both individual and institutional investors. For individuals, you can choose between an investment account and a retirement account, with historical returns ranging between 3% and 8%.
You can start with as little as $25 invested in a single loan. You can also automate your investments with pre-selected strategies that correspond to your financial goals, or you can manually select your investments.
Read our full review of LendingClub
Upstart offers a huge variety of loan options, which is probably why it’s experiencing such enormous growth as a lender. As a borrower, you can use an Upstart loan to pay off your credit cards, consolidate debt, refinance student loans, pay for personal expenses, buy a car, or even start a business.
Smaller loan amounts are available and start at $1,000 or you can apply for as much as $50,000. You can repay your loan funds over three or five years.
What makes Upstart stand out to borrowers?
The approval process is much more holistic than many other lenders. Rather than placing a primary focus on your credit score, Upstart uses your education and your job history to help you qualify for lower rates. The thinking is that by factoring in these considerations, you have a financial potential that lessens your risk. Plus, you can get your loan funds in as fast as one day.
Investors have two choices when selecting Upstart. You can customize a plan for automatic investments or you can open a self-directed IRA to help supplement your retirement savings.
Upstart also states that 91% of their loans are either current or paid in full. This can help you determine the risk associated with the lending platform, which seeks to serve quality borrowers who simply have a limited credit history.
Read our full review of Upstart
PeerForm offers loans on a P2P lending platform in amounts ranging from $4,000 to $25,000. All loans are unsecured, so as a borrower, you don’t have to worry about providing any collateral. You can check your rate by filling out a simple online form.
After that, you may receive one or more loan offers with different rates and terms. If one of those offers works for you, your loan is then listed on PeerForm’s lending platform.
Once your loan is funded by investors, you simply need to submit a few pieces of documentation to verify your identity and income. Examples of information you may need to submit include a copy of your ID, bank statements, pay stubs, and/or recent tax statements.
When you invest with PeerForm, you can choose between whole loans and fractional loans, the latter of which are geared towards individual accredited investors. PeerForm advertises competitive, risk-adjusted returns. PeerForm assigns each loan applicant a grade, which comes with a corresponding interest rate.
Read our full review of Peerform
Fundrise – Real Estate Platform
Fundrise is another P2P real estate platform that gives individual investors access to multimillion-dollar projects. The investment horizon for each project is usually between three and seven years. While that’s certainly not as liquid as investing in the stock market, the benefit is that Fundrise’s investments are expected to perform better.
Investors can earn an 8% to 11% expected annual return. Most plans are charged an annual 0.85% asset management fee, while clients using investment services pay a 0.15% advisory fee.
How does Fundrise choose its investments?
The goal is to buy properties for less than their replacement cost, then improve them using local industry experts. All aspects of the project are analyzed, including the sponsor, the property itself, the local market, and the overall economy. Fundrise states in a year of reviewing 2,000 proposals, they approved less than 2%.
Fundrise Investment Plans
Fundrise offers three different investment plans:
Supplemental Income creates an ongoing income stream.
Balanced Investing allows you to heighten your diversification.
Long-Term Growth seeks to maximize returns over longer periods of time.
You can even get started with a minimum investment of just $500. Anyone over the age of 18 can invest with Fundrise. Read our full review of Fundrise.
Funding Circle – Small Business Loans
Funding Circle offers a slightly different model, providing P2P small business loans. Approvals can be received in just 24 hours, making it a faster option than traditional banks. Small business owners can borrow between $25,000 and $500,000, with repayment terms lasting anywhere from six months to five years. Plus, you get a dedicated account manager who can help with any questions throughout the process.
Funds can be used for a range of purposes, including increasing cash flow, hiring new employees, buying new equipment, or upgrading your premises. The initial application takes just 10 minutes to complete. Within a day, you may talk to both a loan specialist and underwriter to learn more about your business. Once you’re approved and agree to the loan terms, you can get funding within five days.
Investors can diversify their fixed income portfolios by choosing to invest in secured business term loans through Funding Circle. There is, however, a pretty hefty minimum investment, which starts at $250,000. You can either select notes manually from the marketplace or enroll in automatic investing.
PeerStreet – Real Estate Loans
PeerStreet allows investors to finance short-term real estate loans. According to PeerStreet, their investments could be less volatile than the stock market. Investors select first lien real estate loans that are highly vetted before being offered.
PeerStreet works with private lenders to source these investments, which must meet a variety of requirements using both algorithms and manual processes. Investors can choose their projects one by one or use PeerStreet’s tool to match with investments that meet their chosen criteria. Additionally, you can start with just $1,000 per loan, making it easy to diversify.
What kind of returns can you expect with PeerStreet?
Some investments could potentially bring in double-digit returns, but the company also states that an example yield is 6% to 9% over 12 months. Service fees generally range from 0.25% to 1.0% and are disclosed with each project. Obviously, there’s a risk with any investment, and these real estate loans are no different.
To qualify as an investor with PeerStreet, you must be accredited. That means you must have an annual income of at least $200,000 or $300,000 in joint income with your spouse. Additionally, your net worth must be at least $1 million.
How to Earn Money with P2P Lending
There are no guarantees with how much money you can make investing in P2P lending. It depends on so many variables, including your risk tolerance, the loan types you choose, as well as more general factors like the economy. Some of them advertise the potential for double-digit returns, and most at least say they outperform the stock market while also being less volatile.
P2P lending platforms generally offer investor materials that you can review to get more details on the risk versus return. To help increase your returns, however, you can consider some general advice. First, think about diversification in relation to your broader portfolio and your P2P portfolio.
You probably don’t want to invest solely in high-risk, high-yield loans. Try investing enough money so that you can spread the money over different loan grades.
Is peer-to-peer lending safe?
Just like your returns rely on a number of factors, so does your safety as an investor choosing P2P loans. Your funds aren’t insured, but all P2P platforms must register with the SEC. This keeps them under federal scrutiny to ensure they stay in practice with all the current regulations.
Still, diversity must be a priority in minimizing your risk when investing in these types of loans. If a borrower defaults on a loan you’ve invested in, you’ll lose that money. Be sure to create a healthy balance within your accounts. You can also start off conservatively as you learn the process, then add in higher yield loans to bolster your returns. It’s also important to check out the lender’s vetting process for its borrowers.
Whether you’re interested in borrowing or investing in a P2P loan, there are countless options available today. Personal loans, business loans, and real estate investments have become more accessible to all parties thanks to automated lending platforms connecting individuals on both sides of the equation.
As with any financial decision, the key is to do your own research and compare options. Each P2P lender has its own strengths and weaknesses. Do some digging to figure out which one best meets your needs for either funding or investing. Once you find it, it’s a win-win for everyone.
It happens to the best of us. You might have been totally on top of your budget, and then an unexpected something turns up to throw you off course. Maybe it’s a medical bill, an unforeseen car repair, or a layoff. But regardless of the specifics, you find yourself in need of cash you just don’t have.
If you’re struggling with bad credit the situation is just that much more stressful. Because a poor credit score and history can make it very difficult to get your hands on the unsecured personal loans you need to get through a tough time. And that, in turn, can just drive your credit score even lower if it means you’ll end up defaulting on existing payment commitments.
Unsecured Loans for People with Bad Credit
Fortunately, there are some online lenders who understand that life isn’t always ideal. They’ve created accessible unsecured loans that you aren’t automatically disqualified for just because your credit history has a few blemishes.
Of course, as with any loan, you will be paying interest for the privilege of borrowing the money. And the lower your credit score, the higher your interest rate will be on average. So, it’s important to reserve the use of an unsecured loan for true financial emergencies.
It’s also a good idea to shop around and find the lender that can offer you the best terms for your specific needs and credit standing. So without further ado, here are five of the best places to choose from when you need an unsecured loan even though you have bad credit.
By matching you with a variety of lenders, CashUSA allows you to get an unsecured loan with bad credit.
Plus, their sprawling network of providers can offer sizable unsecured loans of up to $10,000. This can be a godsend if you’re dealing with unexpected medical bills or other major expenses.
Your loan request can be approved within a matter of minutes and funded in as little as one business day, and all credit types are eligible (though interest rates and terms will vary based on your standing).
Loan Amount: $500 – $10,000+
APR: 5.99% – 5.99%
Term: 3 – 72 months
Read our full review of CashUSA
Although it’s not ideal, it’s a fact: most Americans couldn’t come up with even a few hundred dollars to spare in the face of an emergency.
That’s why MoneyMutual offers fast, short-term loans of up to $2,500, even to borrowers with bad credit.
Their services have been trusted by more than two million customers to date, and once approved, you can receive your funds via direct deposit, sometimes in less than 24 hours after approval. There’s no cost to fill out the online application, and it takes just minutes.
Loan Amount: Up to $2,500
Read our full review of MoneyMutual
Whether it’s a quick $500 to cover rent or a serious financial undertaking costing tens of thousands of dollars, PersonalLoans.com can match you with lenders offering the funds you need fast. And there is no minimum credit score.
Better yet, you’ll have up to 72 months (i.e, six years) to repay it in easy monthly installments, making these unsecured loans a great choice for debt consolidation or to pay off a large standing balance at a lower interest rate.
Loan Amount: $500 – $35,000
APR: 5.99% – 35.99%
Term: 3 – 72 months
Read our full review of PersonalLoans.com
Bad Credit Loans
It’s right there in the name: this personal loan company is all about matching you with the lenders who will fulfill your needs, even if you have bad credit.
Loan amounts range from a quick $500 to a more substantial $10,000. Interest rates start as low as 5.99%. Bad Credit Loans is a great first stop on your unsecured loan shopping trip — especially since it’s totally free (and easy!) to submit an application.
Loan Amount: $500 – $10,000
APR: 5.99% – 35.99%
Term: 3 – 36 months
Read our full review of Bad Credit Loans
If you just need a small amount of cash and can pay it off quickly, CashAdvance is a great place to get a personal loan, regardless of your credit score.
Although their lenders tend to max out loan agreements at $1,000 and carry fairly high interest rates, you can get the money delivered directly to your bank account quickly and easily.
Loan Amount: $100 – $1,000
APR: 200% – 2000%
Read our full review of CashAdvance
How to Improve Your Credit Score to Get Better Loans Later On
These lenders offer a much-needed service to borrowers with imperfect credit scores. However, it’s in your best interest to work to improve your credit score over time. That way, you’ll be able to get better loan terms later on down the line. And that includes when you want to take on major financial commitments like homeownership.
If your credit history is dotted with blemishes, it can feel overwhelming, or even impossible, to get back on track. But that’s not the case! By implementing sustainable changes and habits and being persistent, you can rebuild your credit score and create the financial freedom you deserve.
Budgeting and Paying Off Debt
Start by looking at your budget and seeing if you can make any cuts. This will save you money that you can then funnel directly toward your standing debt totals. Some people start with the highest-interest account first, known as the “avalanche” approach.
This approach will save you more money over time. Others prefer the “snowball” method, which means starting by paying off the account with the lowest total and using that success as motivation to tackle your bigger debt projects.
No matter which way you go about it, you can achieve the debt-free lifestyle of your dreams! And sometimes, a personal loan is exactly what you need to start moving in the right direction.