What are the best loan companies for bad credit? Every time an individual’s credit score falls below the 580 points mark, the person is considered to be having bad credit and largely credit unworthy when it comes to the mainstream lenders and loan companies. Whereas it is tough to access loans or credit arrangements at a favorable lending rate when one has bad credit, it is not entirely impossible.
There exist lenders whose business focus is on individuals who have fallen short of the glory of a good FICO score. Whereas they may consider the person’s credit score, these companies go further and determine suitability for credit based on other non-score factors such as residence area, type of employment, and education, among other issues.
7 Best Loan Companies For Bad Credit
Here are notable loan companies that offer loans without an express insistence on a good credit score.
This company is not a lender but a third-party service with a large network of lenders that are willing to give loans up to $10,000. Their service is free to use. You do not need good credit to use their services, in fact, they say this service is ideal for anyone with bad credit.
Because anyone with bad credit can apply to they do look at other information that lenders will want to know such as income, a checking account, and proof of citizenship. It’s simple to use. Fill out their online form, their lenders will review your information, and if your approved view and accept the loan all available online.
The Self Credit Builder Loan is an installment loan that allows you to build a positive payment history while you save money. When you apply for the loan the money is held by one of their partner banks, then you pick the timeframe when you want to pay off this loan (12 or 24 months). Each time you make an on-time monthly payment it is reported to the credit bureaus to increase your credit score. The lowest monthly payments is $25 a month and the maximum is $150 a month making this an affordable option for everyone.
This company is an excellent choice for people who are beginning to build their credit profiles from scratch. In fact, from the outset, Oportun doesn’t require a credit score to access their credit facilities. Every borrowing is reported to the three major credit reporting agencies; Equifax, Experian, TransUnion Equifax, Experian, and TransUnion. These are the agencies responsible for the issuance of credit reports.
This fact offers individuals an opportunity to make the first steps in credit building as long as payments are made on time. The principal amount Oportun can lend falls between $300 and $10,000. Whereas it is possible to apply for a loan online, it is worth noting that Oportun’s lending services are not available countrywide.
If you consider borrowing relatively large amounts of money, but with bad credit, Personify is the ideal company. It can offer loans of up to $15,000 depending on an individual’s place of residence. Depending on the individual’s state of permanent residence, one may be required to pay an origination fee of 5% before loans are given.
A good credit score is not a priority consideration in this case. The interest rates are, however, high and vary from state to state. The high-interest rate is understandable because that is the price of accessing loans despite an individual’s poor credit rating. In extreme cases, the interest rates can shoot up to 180% in some states. Personify, however, has another downside in that its services are not available countrywide. Personify operates only in 28 states. Borrowing from Personify can help build and repair one’s credit history because it is reported to the three leading credit reporting agencies. It is thus very beneficial that payments are submitted on time and without fail.
With the cloud of bad credit on one’s head, Netcredit is the best lending option for educational purposes. It is a beneficial financial discipline platform as it offers budgeting and expense tracking tools. Acceptance and offer of credit depend not only on credit score but also on people with imperfect credit history. An origination fee deducted from the loan amount is levied upon application. The loans issued by NetCredit have high-interest rates punitively in triple-digit levels.
LendUp comes in handy whenever one has an unexpected expense that requires small amounts of money. LendUp is the best choice for amounts not exceeding $1000. The charges available for borrowing vary with the state of residence. Good credit is not a priority consideration for lending. The interest rates are very high and differ from state to state. LendUp’s reach is limited because the loaning services are only available in California, Louisiana, Mississippi, Missouri, Tennessee, Texas, and Wisconsin. Depending on the level assigned to a borrower, LendUp can then submit reports to the three credit reporting agencies
Possible is the best for short-term loans and an alternative for an advance payday loan. The repayment period usually is short, preferably within two months of borrowing. Possible Finance interest rates are very high, which is why one should consider these loans as a matter of emergency. Since Possible Finance compiles reports to the credit reporting agencies, it is thus a valuable platform for building and repairing one’s credit profile by making on-time payments without defaulting.
Related: Best Loans For Bad Credit
Can I get a loan with no credit check?
Yes, it is possible to get a loan with no credit. While most lenders will check your credit score, there are some companies like Oportun and Self that don’t require a credit check to get a loan.
However, these lenders will look at other pieces of your finances such as your income, bank account activity, payment history for rent and utilities, total savings or collateral (cars, home, investments).
Will taking a loan with bad credit affect my credit score?
Any time you finalize an application for new credit, your score will be affected. Most loan companies will be reporting your information to the major credit bureaus and will show up on your credit report as a hard inquiry so it will impact your score by a few points.
Paying your bills on time every month makes up most of your credit score, so if you pay your loan payment on time every month it should increase your score.
While other factors may increase or decrease your score, paying your bills on time should always be something you aim for.
Borrowing without a good credit score presents various challenges that an individual ought to ponder deeply before committing. Whereas some of these loans may bridge the immediate gap in finances, the longer-term costs can be damaging financially. It is also pertinent to thoroughly review all the loan conditions and compare the various interest rates, additional fees, and repayment terms before taking the plunge.
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