Quality Loans are hard to find, especially with a low credit score. Sometimes it can feel like the walls of bad credit are too strong to ever breakthrough. What if you could find an answer to your financial woes? What if you could find a loan that can not only help you out of your financial hardship but also increase your credit score as you pay it off?
Let’s take a quick look into what loan options are available for you with your current financial status.
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Are there loans for people with bad credit?
If you have bad credit, you’re not alone. Only 21% of Americans have a FICO credit score in the “Good” category, according to Experian. If you have a credit score of less than 670, lenders will usually consider you to be a “subprime” borrower or “risky” borrower.
Contrary to popular belief, it is possible to get a quality loan when you have bad credit. Some banks and other lenders might only offer you a limited amount in a loan, or they may charge you outrageous interest.
However, from online banks to P2P lending services, there are low-cost ways to get a personal loan — even when you need to work on your credit score.
It’s important to be selective with the type of loan you choose. Look for a lender that doesn’t require credit checks before issuing you a loan. It’s also a good idea to remember to fully read the terms of your loan before you sign.
How to get an online loan with bad credit
Are you struggling to find a low-interest loan because your credit score is low? Have no fear — MoneyLion is here.
Follow these six simple steps to find the right loan for you and raise your score at the same time.
Step 1: decide how much money you need
The first step in the loan process is to figure out exactly how much money you want to borrow. It’s better to take a smaller loan with smaller payments you know you can manage when you’re rebuilding your credit.
This way, you’ll improve your credit with on-time payments and your improved credit score will qualify you for a bigger amount and better rate in the future.
Here are some common reasons why people take out personal loans.
Having a had time paying off those pesky medical bills? A personal loan might be just the thing to help you cover the costs.
Know exactly how much money you owe before you get a loan, particularly if you have a few bills to cover all at once. Collect all your bills and total them up to see exactly how much you owe.
Debts with high interest are always the most important to pay off first. Look on your banking/credit apps to locate which bills have the highest interest rates. Then compare any other outstanding debts and make it a priority to pay off the highest interest rate items first.
It can be challenging to keep up with all of your credit card balances, household bills, student loans, and more. Consider downloading the MoneyLion app to stay on top of your monthly bills and expenses. We give you access to our spend tracker to keep a tally of your monthly output in categorize to give you a better idea of your spending habits.
Take care of the home repair
Need a new sliding glass door? Or maybe fix the leak under your sink? Minor home repairs are quite common, and it’s easy to spend anywhere from $350 to $500 to complete your home’s necessary renovations.
Particularly when home repairs are a necessity, a personal loan can be the quickest way to get a replacement for your much-needed home improvements.
Cover surprise fees
Having a hard time affording that special gift for mom’s birthday? Is holiday gift planning becoming more and more stressful as the holidays are near? Shopping for loved ones is a common reason why some are turning to a personal loan for a low-stress way to take care of expenses.
Once you’ve got a rough idea of how much you need to borrow, consider a MoneyLion Credit Builder Loan to cover your cost at competitive interest rates and no hard credit check!
Step 2: Lock in low-interest rates
In exchange for giving you a loan, banks charge you interest. Banks and online lenders calculate your interest using a yearly percentage called the annual percentage rate (APR).
APR tells you how much you’ll pay in interest on your remaining balance per year. For example, if you borrow $1,000 on a loan with a 20% APR, you’d pay $200 a year in interest — or about $16.67 per month. Your credit score largely determines the APR you’ll be offered. The higher your credit score, the lower your interest rate will be.
Low APR loans typically carry an interest rate of 8% APR on average. High-interest loans carry interest rates up to 36% or higher for those with bad credit and can be difficult to pay back, so try to avoid them if you can.
No matter how much you need to borrow, there’s one loan source that you should always avoid — predatory payday advance loans.
Payday loan lenders charge high fees because they’re intended only for very short-term usage. It’s not uncommon to see payday loans with APRs of over 700% per year. If you take out a payday advance loan for $1,000 with an APR of 400% (on the lower end for these loans), you’ll pay over $10.75 a day in interest.
A high APR can make it very difficult to pay back your loan. One of the most important things you’ll need to do when you search for a loan provider is to compare interest rates.
Select a bank that offers competitive APRs without a hard credit check. For example, MoneyLion offers a low-cost APR on its Credit Builder Loans, as well as 0% APR cash advances up to $1000 when you link your direct deposit to your RoarMoney account.
Step 3: Prepare personal information and important documents
You’ll need to provide a little bit of personal information before you get a loan. Having your documents ready when you apply can get you your money faster.
Some of the documentation you might need includes:
Proof of ID: Every bank will require you to have some form of photo ID before you can get a loan. Some valid forms of photo ID include driver’s licenses, state-issued ID cards, passports, and military IDs.
Your Social Security number: Your bank may require you to submit your Social Security number before you can get a loan. Keep your personal data safe by only offering your Social Security number to banks you trust.
Other personal information: Your bank or lender will also need your current address, phone number, and birthdate.
Proof of income: Unlike a mortgage or an auto loan, personal loans are unsecured, which means they aren’t backed by collateral. Your bank might ask you to prove that you have enough income to cover your payments by requiring a tax return or pay stub before you can get a loan.
Your bank might also have additional loan application requirements. Check before you apply for a loan to be sure that you have all your documentation in order.
Step 4: Apply for the loan
Once you’ve chosen a lender and you have your documents in order, it’s time to apply for a personal loan. Fill out the application and include any necessary documentation with your application.
The specific forms that you’ll need to fill out and the information you’ll need to provide will vary depending on where you get your loan. The MoneyLion app just requires you to scan your driver’s license. You don’t need to gather any other materials, such as additional paperwork.
Thinking about getting a loan with MoneyLion? First, download the app from Google Play or Apple App store. Apply for a MoneyLion Credit Builder Plus membership with credit builder loans and enter your personal information. As soon as you get approved, you’re eligible for up to a $1,000 personal loan at a low APR.
Step 5: Get approval
After you submit your application, wait for approval. You can speed up the loan application process by double-checking that you’ve submitted all of your information correctly and that you respond to any bank inquiries quickly.
If you’re getting your loan through MoneyLion, you won’t need to sit around and wait for a decision. Once you’re a Credit Builder Plus member, you’ll see a portion of the loan instantly deposited into your account as soon as you request it.
Step 6: Pay your loan back
Congratulations! You’ve gotten approved for your loan — be sure you start thinking early on about how you’ll pay it back.
When you’re approved for a loan, your lender will tell you exactly when loan payments are due. Write down your payment due date and your minimum balance so you remember to pay it back on time each month.
You may even be able to enable automatic bill pay through your bank so you’ll never forget a payment.
Most banks accept a few different types of repayment methods. Wire transfers, direct debits, personal checks, and certified cashiers’ checks are four of the most common ways to pay.
If you get your loan through a physical bank, you may be able to pay in cash as well. Most banks don’t accept credit card payments. Ask about acceptable payment methods as soon as you accept the terms of your loan.
MoneyLion loan perks
Are you looking for a quick and easy way to land a loan with a low credit score? MoneyLion banking has you covered. Here are some of the benefits that MoneyLion Credit Builder Plus members get when you take out a personal loan.
Speed and convenience: MoneyLion personal loans are instantly approved. You’ll see the money deposited directly into your MoneyLion Checking account — you won’t have to wait days or even weeks for approval or funding.
Credit-building: MoneyLion loans are proven to build credit. Seventy percent of members say that their scores increased when they paid back their MoneyLion loan on time.
Low APR: With MoneyLion, you can get a credit builder loan with a low APR, lower than most traditional banks and credit cards offer.
Cash today: You can get a Credit Builder Loan no hard credit check, up to $1,000 with same-day funding. If you need another loan after you pay it off, there’s no need to reapply later.
Credit is not a factor: Credit doesn’t play a role in your MoneyLion loan application. If you’ve got bad credit or you’re still working to build credit, a loan from MoneyLion can get you the money you need with an interest rate you can afford.
Reaching financial highs with MoneyLion
Knowledge is power when it comes to borrowing money. Banking MoneyLion gives you instant perks and instant information to ensure that you are making the best financial decisions. The MoneyLion credit builder plus membership is proven to help build up your credit score.
As a plus member, you can track your progress, monitor your credit, and also earn Lion’s share cashback up to $19.99 monthly. Sign up today to instantly receive all of the benefits Moneylion banking has to offer.
Who will lend me money with bad credit?
Banking with MoneyLion not only helps you build up your credit score, but you can borrow money without a hard credit pull.
Where can I borrow money ASAP?
MoneyLion Instacash offers same-day funding 0% APR cash advances up to $250. No hard credit, no hidden fees, and zero gimmicks.
How can I get a small loan with bad credit?
Our Credit Builder Loan is ideal for those with credit challenges. Qualify for up to $1000, no hard credit check, and access to our 0% APR cash advances.