Why Having Bad Credit Won’t Stop You from Receiving an Online Loan
April 4, 2019
Personal loans can help people pay off credit cards, afford a family vacation, fix their car, and everything in between. They’re ideal for emergency situations but can be extremely beneficial for planned expenses as well. Also, with most lenders offering online options, receiving these loans are hassle-free and fast.
While these are easily accessible for some, those dealing with bad credit scores may wonder how they can receive an online loan when they need it most. Some decide to take out a high-interest payday loan, others reach out to family members for help. Unsure what you should do? Don’t worry, receiving an online loan while having bad credit is not as difficult as you may think.
Where you can look to take out a loan
Typically, personal loans are available from:
- National banks
- Credit unions
- Community banks
- Online lenders
With that said, when it comes to poor credit scores, some of the above options are not as possible. For example, banks usually require a strict credit score minimum to receive an unsecured loan.
Credit unions can have less-strict eligibility requirements and offer favorable loan terms. It is important to keep in mind, though, that receiving a loan from a credit union may not be as quick as online lending, and there is the potential that you may still be denied.
Finally, there are online lending options. Online lending is likely the best way to receive a loan when your credit score is not in a good place. Online lenders typically have flexible terms, fewer restrictions, and some do not even require a credit score check.
But, if you are considering an online lender for your personal loan, it is essential that you steer clear from those with extremely high-interest loans and restrictive terms, typically seen in payday loans.
Why you should avoid a payday loan
Payday loans can seem enticing. You receive the money quickly, there are few restrictions, and the application process is easy. What you may not realize, however, is how crucial is it to repay the loan as soon as possible. If you don’t, additional fees will be tacked on, making the loan cycle very costly. Payday loans have an average APR around 400%, with only 2-week terms! They are, unfortunately, designed to keep you in debt.
In comparison, online lenders, like Illinois Lending, have average APRs around 99%, with no repayment or hidden fees, while also keeping flexible terms available. You can have your funds sent directly to your bank account or choose same day pickup.
What you’ll need to take out an online loan
Although requirements vary based on the online lender, you’ll likely need:
- Your proof of residence
- Last 90 days of banking history
- Weekly take-home pay of at least $300
- Current pay stub (or income statement)
- A valid driver’s license or state ID
- A voided check (or direct deposit form)
Once approved, you can sign into the online customer portal to receive your funds as soon as the next day.
Final tip: Although online personal loans are a good choice when dealing with a low credit score, the best way to maximize your loan options is to begin working on improving it. Pay off at least your minimum credit card balance each month, pay down your debts, and double check your credit report for errors to start to see your credit score begin to move in the right direction.
Interested in applying?
With Illinois Lending, you can easily apply for and receive personal loans regardless of your credit score situation. Apply online through our secure portal or submit the necessary documents in person and receive your check the same day.