Integra Credit
Bad Credit Loans

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Online Loans For Bad Credit

A poor credit score should not be a barrier for individuals who need financial support, and many lenders agree. Even if you believe you have “bad” credit, you can still apply and potentially be approved for a loan online.

Emergencies happen, and we cannot always plan for major life changes. Whether you are in need of a loan for an emergency expense, debt consolidation, a medical bill, or a wedding, you are not alone. In fact, around 131.0 million Americans have taken out a personal loan in their life.

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What Gives Someone a Bad Credit Score?

A credit score can be flagged as “bad” for many reasons. Below are a few of the most common reasons that contribute to a bad credit score:

Failing to meet the terms of your credit agreements.

For example, late payments, missed payments, or payments not meeting the required minimum can all negatively impact your credit score.

Only making minimum payments each month.

If you only make the minimum required payment toward your credit card bill each month, you can avoid late fees and your account may remain in good standing. However, borrowers who fall into the cycle of only paying the minimum on their credit cards can find themselves facing higher interest charges.

Identity theft.

Even if you never personally make a mistake, you may still be negatively impacted by identity theft.

Declaring bankruptcy.

Bankruptcy is a legal process handled in federal courts across the United States. This process can provide relief to borrowers who are simply unable to repay their debts. Lenders can still be repaid, but borrowers filing for bankruptcy may be forced to liquidate or sell some of their assets in order to repay lenders. While the “fresh start” of bankruptcy may be necessary in certain circumstances, there are certainly downsides to going through the process. Bankruptcy will negatively impact a borrower’s credit history for several years. According to TransUnion, a Chapter 7 bankruptcy can stay on your credit report for up to 10 years from the date the bankruptcy was filed, while a Chapter 13 bankruptcy will fall off your report seven years after the filing date. Consider obtaining a consultation with a licensed bankruptcy attorney for more information on bankruptcy.
A stack of credit cards from Visa and MasterCard

What is the Difference Between Bad Credit and No Credit?

A borrower has “no credit” if there is no record of that person’s credit history. This may happen if an individual has never had a credit card or taken out a personal loan. “Bad credit,” on the other hand, means there is a record of a borrower’s credit history, and it reflects some negative borrowing behavior.
A person holding blocks with interest rates and percentage increases

Does Having Bad Credit Affect Your Interest Rate?

Having poor credit can carry several negative repercussions for the borrower. A history of missed payments may cause a dip in your credit score. As a result, some lenders may avoid working with these individuals, or offer them a loan with higher interest rates.

How Can I Improve My Credit?

Fortunately, there are many ways to help improve credit ratings over time. Some of the most common and effective methods include the following:

Always make on-time payments.

The most common reason for a bad credit score is late or missed payments. Avoid this by paying your bills and credit commitments on or before their due date.

Check your score for accuracy

Sometimes there are unresolved errors on credit reports. To improve a bad credit score, you should resolve any errors with the credit bureau.

Develop a thoughtful strategy

You will need to utilize credit responsibly to rehabilitate a bad credit score. Opening many credit accounts or closing off all available credit may have a negative impact on your score.

Can I Get a Personal Loan with Bad Credit?

When you apply for a personal loan, lenders may consider factors other than your credit score to get a complete picture of your financial health. If you need a personal loan, bad credit alone may not prevent you from obtaining funds. After a lender considers your entire financial picture, you could still be able to receive an approval for the money you need.

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What Are Some Types of Loans for People with Bad Credit?

There are many ways that borrowers with bad credit can apply and be approved for a loan. Below are some of the most common types of loans available.
A person holding a piece of paper detailing a personal loan for bad credit

Personal Loans

A personal loan is an amount of money borrowed from a lender, repaid in fixed installments over the course of a set period of time. You can obtain a personal loan from a bank, a credit union, or through a quick and convenient online lender. You may be able to get a personal loan with bad credit.

Personal loans can be used for a wide range of purposes:

  • Consolidating existing debt
  • Covering major life expenses
  • Funding a home improvement project

Many personal loans do not require the borrower offering personal property as collateral; this is called an “unsecured” loan. Some personal loans, however, are secured. This means you may be asked to use a piece of personal property, such as your home or car.

A couple holding a home, signifying the ability to have a joint personal loan

Joint Personal Loans

A joint personal loan is a loan taken out by more than one borrower, referred to as “co-borrowers.” These loans require both co-borrowers to be responsible for repayment of all funds borrowed. Consequently, both borrowers’ credit scores can be affected by the repayment of the loan if the lender reports repayment history to a credit bureau. Joint personal loans are most common for home mortgages and vehicle purchases. Spouses or parents are often common co-borrowers for joint personal loans.

A possible benefit to applying for a joint personal loan is that if your co-borrower has a more favorable financial situation than you do, you may be able to qualify for financing that you would not otherwise be eligible for. For example, you may be approved for a larger amount, a lower interest rate, or more favorable repayment terms.

A woman applying for a peer-to-peer-loan from her smartphone

Peer-to-peer loans

Another common type of personal loan is the peer-to-peer loan. With a peer-to-peer loan, you receive a loan from an individual or group of individuals, rather than a traditional bank. Peer-to-peer lending is a common alternative lending tool for individuals to obtain the funds they need. Peer-to-peer lending is also known as crowd lending, social lending, or P2P lending. Essentially, it is a process whereby an online service matches borrowers and lenders together. The online service will set the loan’s rates and terms for the lender or investor.

For borrowers, the application process for a peer-to-peer loan is similar to other online lending options. The peer-to-peer lending company you go through will check your eligibility through a pre-qualification process before matching you with potential lenders. You may be asked to provide an origination fee, which is a fee paid upfront to cover the cost of loan processing.

Stacks of coins behind a stopwatch counting down a 24-hour loan

24-Hour Loans or Instant Cash Loans

Instant cash or 24-hour loans are available for borrowers with bad credit. If you’re looking for the quickest option to receive a personal loan, you may be interested in a “24-hour loan.” This loan is named in this way because the borrower can receive funds within the same day.

This kind of loan is popular for consumers who have found themselves facing an unplanned expense or an expensive emergency. While you can receive a 24-hour loan in person by visiting a brick-and-mortar lender, the rise in the flexibility and convenience of online lending means consumers often do not have to leave the comfort of their own homes to receive their funding within 24 hours.

A hand holding keys to a home from a hard money loan

Hard money loans

A hard money loan, also known as a short-term bridge loan, is an asset-based secured loan. This means a borrower will have to “put up” collateral or offer the lender collateral security in order to obtain financing. These types of loans are almost always secured by real property, such as a piece of land, a residential home, or a commercial building owned by the borrower. These loans are not generally granted by traditional banks; rather, they are usually issued by private investors or investment companies. As a result, the approval process for a hard money loan can be quicker than a traditional bank loan.

Hard money loans are a common option for borrowers with bad credit. Because they are heavily secured loans, the borrower’s creditworthiness is not as much of a concern for hard money lenders. A hard money loan may be attractive for a consumer with poor credit but substantial equity in their real property. Hard money loans can also be issued to borrowers who are currently purchasing the real property they intend to use as the collateral for the loan. For borrowers in this scenario, hard money loans can be an option for obtaining financing until the borrower has had the opportunity to secure a more traditional loan from a bank.

A stack of Credit Cards

Line of Credit

A personal line of credit functions similar to a credit card. Just like a credit card, borrowers only pay interest on the amount of money they actually use, regardless of how much money they could spend within the loan’s terms. Lines of credit differ from most other personal loans in a significant way. For many other personal loans, borrowers receive the money in one lump sum. With a line of credit, however, borrowers can choose the amount they would like to take out and can continue to request more funds as the balance is repaid.

Borrowers can draw upon a line of credit up to the loan’s maximum. You usually can get a line of credit with bad credit online. Many lenders offer online applications and take more into consideration than just the borrower’s credit score.

A piggy bank with coins for a short term loan next to a clock

Short Term Loans

Short term personal loans vary from traditional personal loans primarily based on their repayment periods. The repayment period of a traditional personal loan can be several years long, while a short term personal loan can have a repayment period as short as a few weeks, and is often repaid within a year.

Short term loans are an option for individuals with bad credit. While your credit score may still be considered when you apply for a short term loan in person or online, the lender could look at other documents, including your paystubs, to evaluate your entire financial situation as a whole. The process for short term personal loan approval works much like that of any traditional personal loan application. After approval, borrowers will receive a funding offer, an interest rate, and other terms, which they will be able to either accept or deny. Like most other personal lending options, this process can occur entirely online.

A family celebrating their new loan

Loans From Family

Receiving a loan from a family member is the least formal way for borrowers with poor credit to secure a personal loan. Borrowers may or may not choose to enter into a written contract with their family members. Family members can also decide whether they wish to set interest rates or a loan repayment schedule. Before you enter into a loan with a family member, make sure you are familiar with the tax consequences of doing so for both the lender and the borrower. For consumers looking to improve their credit report, going with a loan from a family member may not be the best choice long-term, as your family member cannot report your history to any credit bureaus.

How to Qualify for a Loan with Bad Credit

As previously discussed, you can often still qualify for a loan with bad credit. A low credit score does not have to hold you back from obtaining the funds you need.

Following these simple steps can help borrowers with poor credit increase their odds of approval:

Know what your credit score is right now

While many lenders consider several factors in their lending decisions, some lenders operate on a minimum credit score requirement. Your credit score can change frequently, so knowing what your credit score is at this particular moment in time can prepare you for which lenders may be able to work with you. Borrowers can check their credit scores for free at websites like CreditKarma or Experian.

Compare lenders

While this is not always the case, every new application borrowers make for a personal loan could result in a hard inquiry to their credit, temporarily lowering their score. A solution to this dilemma includes comparing lenders before applying to see which lenders may offer the best chances for approval.

Understand your loan options

There are many ways, other than having a great credit score, that you can increase your chances of qualifying for a loan. For example, consider whether you may be able to secure a co-signer or provide collateral to a lender. Doing so could help certain borrowers qualify for lower interest rates than they could receive if they borrowed independently or via an unsecured loan.
A woman holding her credit card looking at a statement

Your Customer-First Online Lender

Are you considering applying for an online personal loan? Your credit doesn’t have to hold you back. Integra Credit understands that no one is perfect, and many Americans have bad credit. Our process considers more than your credit score alone and we can often help you get the money you need.

Personal loans through us are easy to understand, and our knowledgeable representatives are here to help answer your questions.

Even if you think you have bad credit, you can check your loan options easily. You can choose how much cash you need, complete a quick and secure online application, and receive an approval decision. Most customers receive their approval decision within seconds and, if they are approved, can receive their funds in the following business day*.

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