Bad Credit Loans
Loans for Those with Bad Credit
At MoneyKey, we understand that the process of borrowing money may be difficult and time-consuming at times. As an online lender and credit services provider, our mission is to provide loan and line of credit products and services to underserved individuals, including those with poor credit. If you have been denied a loan from a financial institution due to a poor credit score, MoneyKey may be able to assist you with your cash needs.
Although good credit may increase your chances of qualifying for better loan rates, there are several types of online loans available for those with poor credit. Every type of loan has potential benefits and things to look out for, so it’s important to take a close look at your specific situation and decide which choice is best suited for you. Remember that short-term bad credit loans are not a long-term financial solution, and MoneyKey strongly encourages you to practice responsible borrowing.
Today, we’re going to cover many of the important details surrounding bad credit loans to help give you a well-rounded look into this type of financial product.
What is Bad Credit?
Your credit score is a number that financial institutions look at to get a better understanding of what type of borrower you’ve been in the past. It summarizes important elements of your financial profile, like your ability to pay bills on time, the age of your credit history, how much debt you’re carrying, and more, and distills this information into a three-digit number that can play a big part in determining whether or not you get approved for the loans you apply for.
Your credit score exists on a sliding scale, and depending on what your score is, you’ll fall into a particular bucket. If you find yourself on the lowest rung of this ladder, you’ll have what’s considered to be bad credit.
If you’ve ever signed up for a credit card, gotten approved for a loan, or taken certain other financial actions, there’s a very good chance you have a credit file with a major credit bureau – Experian, Equifax, or TransUnion. This file will have all sorts of information on your financial profile, like whether you’ve paid certain types of bills late (or missed payments altogether), how much debt you have, and more. There are different scoring models out there, but the most commonly used one in the U.S. is the FICO model. There are five main categories that are used to create your score. They include:
1. Payment History (35%)
The is the highest weighted category of them all. It’s affected by making on time or late payments on bills that are reported to a credit bureau. So, if you consistently miss payments on your credit card, loan, or even phone bill payments, you could be doing harm to your credit score. The longer these payments go unpaid, the worse the damage is likely going to be to your score.
2. How Much Debt You Have (30%)
This category looks at how much outstanding debt you’re currently carrying, and includes accounts like your credit cards, any personal loans you might have, your mortgage, bills that are currently with collection agencies, and more.
One of the most important numbers here is your credit utilization ratio. This is a number expressed as a percentage that compares how much available credit you have – e.g. the total limit of all your credit cards combined – to how much money you owe on these accounts. The higher your credit utilization ratio, the riskier you might seem to lenders. Do your best to keep this number under 30%.
3. How Old Your Credit History is (15%)
Generally speaking, older credit accounts can have a bigger impact on your credit score. So, if you’re able to keep an account in good standing for a long period of time, it can have a greater impact on your score. Keep this in mind before you decide to close any old accounts.
4. Mix of Different Types of Credit Accounts (10%)
The more diversity you have amongst your credit accounts, the better. This isn’t to say that you should open new accounts just to diversify your portfolio. In fact, you should never apply for more credit unless you absolutely need to and are sure you’ll be able to afford your payments.
What is a Bad Credit Score?
If you do a quick search online to find out what’s considered to be a poor credit score, you might see different numbers from different sources. Having said that, when we’re talking about your FICO score, it’s considered to be poor if it falls below 580 . This number is on a scale between 300 and 850.
If you look at all the different categories of your financial profile that are considered when determining your credit score, you can draw a line between those categories and what actions of yours may have led to you having bad credit. For starters, if you’ve consistently missed or made late payments on accounts that report your payments to a credit bureau, this is likely one of the biggest culprits of your poor credit. Or if you’re right up to the limit of the total amount of revolving credit you have available to you across all your accounts, there’s a good chance that this may be affecting your credit score.
Your credit score can affect your chances of getting approved for a loan, what types of loans you can get approved for, and the rates and terms of those loans. Overall, your aim should be to keep your score as high as possible to give yourself a better chance at getting qualified for loans with favorable rates. Having said that, you may qualify for bad credit loans even with a poor score.
What is a Bad Credit Loan?
A bad credit loan is a personal loan that’s designed specifically for people with poor credit. With these loans, a financial institution won’t place as much emphasis on your credit score when deciding whether or not to approve your request for a loan. Instead, they’ll focus more on things like your income, employment situation, and more.
While bad credit loans can be a useful option in certain circumstances, you should keep in mind that because you don’t have as strong of a history as a financial institution would like, the loans you may get approved for will likely come with relatively high interest rates. Because of this, you’ll want to make sure you only apply for one when you absolutely need some financial help. You should also make sure you’ll be able to afford to repay it before you submit an application, otherwise you’ll risk doing even more damage to your already poor credit score.
When to Consider Applying for Bad Credit Loans
If you’re thinking of applying for a personal loan for bad credit, you’ll need to have some idea of when it’s appropriate to do so, and when it isn’t. While you’re going to want to do your due diligence with any type of loan that comes with steeper rates than usual, there are definitely instances where a bad credit loan can help handle a financial jam.
So, when is the right time to look into applying for bad credit loans? Their main purpose is to help you manage a financial emergency if you don’t have the savings – or any other means – to handle the expenses that come along with your emergency. But like we said, it’s just as important to understand when you shouldn’t apply for a poor credit loan. Never apply for a loan of this kind for things like:
- Vacation expenses
- Shopping trips for non-essential items
- Recurring bills that you should budget for ahead of time
Having said all this, the fact that you may be facing an emergency expense without the savings to deal with it doesn’t mean that you should apply for bad credit loans without a second thought. Like we mentioned earlier, one of the most important things to do before you submit an application for any type of loan is to make sure you’ll be able to pay back what you owe. This means you’ll need to look at what your payment schedule would be and see if this would fit into your current budget.
So, when should you consider applying for a bad credit loan? Like we said, this should be for emergencies only, which can include things like:
- Unexpected auto repairs
- A trip to the emergency room
- Unforeseen home repairs
Where Can You Find Bad Credit Loans?
If you decide that your situation could warrant a poor credit loan, doing a quick Google search online for bad credit loans offered in your state is a good place to start. But what will you find? Well, the options that come up can fall into one of two buckets – loans from a storefront financial institution, or online loans. There are some important differences between these two categorizations, so let’s take a look at a few of them.
A storefront lender is what it sounds like. It’s a brick and mortar location that services the borrowing process in person. This means that if you borrow money through this type of institution, you’ll need to go to their storefront location and speak to someone who works there.
This type of borrowing process is good for anyone who would rather deal with a store associate in person and won’t have any problems with the travel time, store hours, or anything else that comes with going to a physical store. It can also be a preferable option if you don’t feel comfortable navigating the borrowing process online. Just keep in mind that financial institutions that offer or service online loans generally do their best to make this process as straightforward as they can.
Online Poor Credit Loans
You may have already guessed it, but online loans give you the option of borrowing money over the internet. This process involves applying, getting your money, and paying off what you owe online. It also means that it’s generally easy to pull up the rates and terms of these types of loans.
Benefits of Online Bad Credit Loans
If you’re looking for loans with bad credit, there are few benefits you might reap by opting for an online loan. Here are some of the most significant ones.
1. Speedy Application Process
When you’re in a financial pickle and you need help handling a financial emergency, the last thing you’re going to want to go through is a loan application that takes you a long time to fill out. Online loans will typically remove some of the minutiae that may have previously come with applying for a loan. For example, if you want to apply for a loan in person, you’ll need to start by finding time in your schedule to make your way to a storefront location. This may be easy if you live close to one and have some free time on your hands, but this won’t be the case for a lot of people. You’ll then need to account for whatever wait time you might run into on top of the time it takes to speak to an associate and fill out an application. With an online loan, you can usually get through an online application in just a few minutes. This will depend on the organization that you’re applying for a loan with.
2. It’s a Convenient Process
We just touched on a lot of the parts of the in-person borrowing process that can slow you down on your quest to get approved for a loan, and how the fast nature of an application for an online loan can help to speed things up. But on top of the fast application process, it’s also important to note how convenient it generally is to apply for a loan online. If you want to apply from the comfort of your living room couch, you can do that. If you want to take a few minutes out of your lunch break at work to submit an application, you can. You can even apply from your phone while you’re on the go as long as you have internet access. Depending on who you’re applying with, you may even be able to apply any time of day or night.
3. They’re Easy to Research
One of the most important parts of applying for any type of loan is to make sure that before you even think about submitting an application, you do thorough research on your potential options. If you want to go the route of an online loan, that research process is simple. As long as you’re dealing with reputable financial organizations, you should be able to find all the information about their products that you need on their site. All you need to do is Google bad credit loans offered in your state, look at what different financial institutions have to offer, and see which options would be the best fit for your financial situation.
Personal Loans through MoneyKey
If you’re looking for loans with bad credit, MoneyKey may be able to help! We offer and arrange loans online in the form of installment loans and lines of credit. We also service the CC Flow Line of Credit provided by CC Flow, a division of Capital Community Bank, a Utah Chartered bank, located in Provo, Utah, Member FDIC. You may be able to get approved for an online loan between $200 to $3,500! With a personal loan through MoneyKey, you may also be able to get your funds the same business day if approved*. Let’s take a look at some of the other benefits of online loans through MoneyKey.
Benefits of an Online Loan Through MoneyKey:
- An application can be completed online in just a few quick minutes.
- It’s a fast and simple borrowing option.
- As long as you’re able to access the internet, you’ll be able to apply for loans with bad credit through MoneyKey.
- Verify your info with our Customer Care team and you may be approved in minutes♦.
- Our Customer Care agents are friendly and helpful.
- We’re here for you 7 days a week to guide you through any part of the application process.
Quick Funds for Emergencies*
- If you’re facing an emergency expense, you can get the funds you need quickly.
- You may be able to get your funds as soon as the same business day*.
- A fast and simple way to get the cash you need, when you need it.
Different Types of Poor Credit Loans
If you’re looking for a bad credit loan, there are different options that may be offered by financial institutions that service these types of loans. Before you decide to apply for any of them, it’s important to understand what financial products are out there. To help get you started, here are three common types of loans that may be available to people with bad credit.
1. Installment Loans
Installment loans are one of the most common types of personal loans out there. If you’re on the hunt for a poor credit loan, there’s a good chance you’ll stumble upon installment loans. If you get approved for one of these types of loans, your funds will come to you in the form of a lump sum. You’ll then need to pay back everything that you owe – which can include your principal balance, interest, and certain other fees – over several months or years depending on the type of installment loan. Your payments will generally be of equal value and they’ll usually be scheduled on the same day or days each month. These can be a good option to help you handle an emergency expense, as you might be able to get funded the same day you get approved, depending on the financial institution you’re working with as well as your bank’s policies.
2. Payday Loans
There are some similarities between fast payday loans online and installment loans, namely that if you’re approved, you’ll get your money in a lump sum. But there are also some very important distinctions. One of the biggest ones is that unlike an installment loan where your payments will be spread across a relatively long period of time, with a payday loan, you’ll need to pay back everything you owe on your next pay date. These loans are typically a very expensive form of credit, so you should only consider applying for one if you’re facing an emergency and are out of options. Even in that scenario, you’ll need to make sure you can afford to repay what you’ve borrowed before you submit an application.
3. Lines of Credit
While there are some clear similarities between installment and payday loans, lines of credit are fairly different. In the world of personal loans, they fall into the category of revolving credit. This is an open-ended type of loan that, if approved, you’ll be able to draw from a credit limit on a continuous basis. This means that you can borrow money against your limit, pay it back, and draw funds again. This also means that your account won’t be immediately closed once you’ve paid back what you owe. You can draw money if you have available funds and your account remains in good standing. It’s important to note that the fees and interest you’ll be charged will only be on the amount you’ve drawn, not the total amount of your line of credit limit.
Other Types of Loans for Bad Credit
So far, the types of loans we’ve been discussing have been unsecured loans. This means that in order to qualify, a financial institution will look at a number of different aspects of your financial profile to determine your creditworthiness. A title loan on the other hand, is a secured loan. If you want to get approved for this type of loan, you’ll need to provide the organization issuing the loan with some sort of collateral. One of the most common types of title loans is a car title loan. For these, the collateral you’ll need to provide to qualify is your car.
This type of poor credit loan may be a viable option if you have bad credit and are out of other options, but just remember that if you aren’t able to pay back what you’ve borrowed, you’re putting a substantial asset at risk. For this reason, these loans should be treated as a last resort.
Credit Card Cash Advance
A credit card cash advance may be another way for you to get the money you need to help you handle an emergency expense. This will essentially allow you to withdraw money from an ATM with your credit card instead of your debit card.
Just remember that this isn’t the same thing as using your credit card as you normally would. The interest rates and fees on a credit card cash advance are generally very high, and interest on the money you’ve withdrawn will start to accrue right away, unlike with your normal credit card purchases.
What to do if you Need a Personal Loan with Bad Credit
Any time you apply for a personal loan, whether you’re approved or not will largely be dependent on the financial institution you’re applying for a loan with and the state of your credit history. But if you have poor credit, that doesn’t necessarily mean you’re out of options. This is where a personal loan for bad credit comes in.
There are some financial institutions that may weigh certain factors more heavily than they do your credit score. This may give people with bad credit a chance to get approved for a loan. Let’s take a look at some things you can do to help you find a personal loan for bad credit.
1. Look at Different Loan Options
If you’re looking for a bad credit loan, there are different loan types out there that may fall into this category. For example, if you run into an unexpected home or auto repair that you need to take care of right away, you might want to look into payday loans online. If approved, you’ll be given a lump sum and will need to pay it back in full with interest and/or fees, typically by your next pay date. If the turnaround time to fully paying off what you’ve borrowed sounds a little too fast with a payday loan, you may also want to consider installment loans for bad credit online. These will still provide you with a lump sum that you’ll pay back in installments over the course of a pre-determined amount of time.
2. Work to Build Your Credit History
Even if you manage to get approved for a personal loan with bad credit, there are certain caveats that may come with it, like high interest rates. If you have a poor credit history, look for ways to start building it. With a better score, you may have more borrowing options available, more products at your disposal, and with better rates. While your credit score is a dynamic number that can be affected by a number of different factors, doing things like paying your bills on time, disputing errors on your credit report, and keeping a low balance on credit cards may put you in a position to potentially improve your score. However, if you have a poor score and find yourself in an emergency situation where you need an influx of cash, there may still be options out there for you.
Consider Other Options Before Applying for a Bad Credit Loan
If you need some financial help in an emergency situation but you’re not ready to apply for a bad credit loan, you may have certain other options at your disposal. One potential way to get the money you need is to ask someone who you’re close with, like a family member, spouse, or close friend, to consider co-signing a loan with you. If they do, the financial institution looking at your application will take their credit score and other credentials into account when deciding to approve or deny your application. This may help you get approved for a loan that you otherwise wouldn’t be able to. Just keep in mind that there is a lot of risk involved for whoever is agreeing to co-sign your loan. If you start to miss payments, they’ll be on the hook just as much as you, which could ultimately damage their credit score.
How to Prepare to Apply for a Personal Loan with Bad Credit
If you do find yourself in a position that you feel warrants applying for a personal loan with bad credit, it’s important to understand what the potential requirements may be. These will vary between different financial institutions, but there’ll often be some overlap. For example, they’ll often take into consideration whether you have:
- A regular source of income
- An active bank account
- Valid contact details
If you meet these requirements, you may be eligible for a loan. Make sure to always check what the lender’s requirements are before you apply for a loan.
Frequently Asked Questions
Are There any Direct Lenders That Offer Loans for Those with Bad Credit?
If you have poor credit, personal loans online from direct lenders may be a good option for you. Some direct lenders consider a variety of factors other than credit scores to determine your creditworthiness. Working with a direct lender who weighs a number of different factors in addition to your credit score may improve your chances of qualifying for a personal loan. In reviewing your application for an installment loan, a personal loan provider like MoneyKey takes into consideration whether you:
- are of legal age to contract in your state
- are a US citizen or permanent resident
- are a resident in the state where the product is offered
- have an active bank account
- have a regular source of income
- have a valid contact number and an active email address
We are a direct online lender in Delaware, Idaho, Kansas, Mississippi, Missouri, New Mexico, Tennessee, Utah and Wisconsin. In Texas, we arrange loans as a Credit Access Business and a Credit Services Organization.
MoneyKey also services Lines of Credit offered by CC Flow. CC Flow is a division of Capital Community Bank, a Utah Chartered bank, located in Provo, Utah, Member FDIC.
MoneyKey will be your single point of contact for all questions and concerns with respect to loan products offered through the MoneyKey website.
Check out the Rates and Terms page to learn more about the loan product available in your state of residence.
As a result, you may qualify for a personal loan even with poor credit. Complete our online application today to see if you qualify.
Is Working with a Direct Lender the Right Option for me if I Have a Bad Credit Score?
When you borrow from a direct lender, such as MoneyKey, the process of applying for a personal loan may be simple, quick, and safe. Your personal information will be protected, and the process of applying is typically straightforward.
Another benefit of working with a direct lender like MoneyKey is the quick application process. At MoneyKey, we understand the importance of speed when you’re dealing with an unexpected emergency expense. That’s why it only takes a few minutes to submit our online application, which is available for you to fill out 24 hours a day, 7 days a week. If approved, you may receive your funds as soon as the same business day*.
When Will I Get Funded?
If you apply for an online loan through MoneyKey and are approved, you may receive your funds as soon as the same business day*.
All funding cut-off times are subject to change. The date and time funds are made available to you by your bank are subject to your bank’s policies. If you require any assistance or for more information, contact Customer Care at 1-866-255-1668.
Will a Personal Loan Hurt My Credit Score?
Maintaining a relatively high credit score is important for qualifying for low-interest loans, increased borrowing capacity, and better credit cards. A high credit score proves to financial institutions or other direct lenders that an individual has demonstrated responsible borrowing. Making financial decisions that hurt your credit score can impact your financial health in the future. If you get approved for a personal loan and start to make late payments or miss them altogether, this can have a negative impact on your credit score. However, assuming your payments are reported to a credit bureau, making on time payments over a long period of time may have a positive impact on your credit history.
How Do Payday Loans Affect a Credit Score?
Depending on the financial institution, payday lenders may not report your payment history to the major credit bureaus. As a result, paying off your payday loans in a timely manner might have no impact on your credit score. However, your payday loan history file may be picked up by a debt collector if you fail to repay the payday loan. The debt collector is then able to report your outstanding debt to the national credit bureaus. Ensure that you repay your payday loans on time to avoid any negative impacts to your credit score.
How Do Installment Loans Affect a Credit Score?
Some types of installment loans, like mortgages and auto loans, are sometimes reported by the lender to major credit bureaus, such as TransUnion and Equifax. By gathering your loan history file and other credit information, these credit bureaus generate a credit report to represent your creditworthiness, reflected by your credit score. As a result, failing to pay off your installment loan balance on time may be reflected in your credit score.
However, some lenders don’t report to major credit bureaus, so it’s important to do the proper research to know whether your payments will be reported or not.
How Do Lines of Credit Affect a Credit Score?
When applying for a line of credit with some financial institutions, the lender may perform a hard inquiry on your credit report, which may impact your credit score. Like opening another type of credit account, such as a credit card, opening a line of credit may appear on your credit report as a new account. At this point, factors that affect your credit score when utilizing a credit card apply to your new line of credit account as well. For example, having a relatively low or extremely high utilization rate could potentially impact your credit score.
What Makes a Payday or Installment Loan Different from a Line of Credit?
As mentioned previously, lines of credit are considered to be revolving credit. If approved for one, you’ll be given a credit limit which you can draw funds from on a revolving basis whenever you need money, and as long as you have available credit and your account is in good standing. With lines of credit through MoneyKey, your charges will be based on the funds that you use, not on the total amount of your line of credit limit. If you have an outstanding balance, you’ll be required to make Minimum Payments to keep your Line of Credit account in good standing.
A payday loan is a short-term loan that you’ll be required to pay back in full on your next pay date. Depending on the type, an installment loan can sometimes also be a short-term loan, with repayment required in installments over time.
Why Choose MoneyKey for Bad Credit Loans?
MoneyKey has served more than 400,000 customers since 2011. There are several benefits in choosing us for bad credit loans:
- Our exceptional Customer Care representatives are available by phone, email or online chat.
- We protect your information in accordance with industry standards.
- Our Customer Care team is available 7 days a week, including most holidays.
We encourage you to use our products and services responsibly.