The Internet has revolutionized the lending industry. Not only did it increase the types of loans available but also made them much more accessible. Today, there are literally thousands of online lenders offering various types of loans, including bad credit loans. Bad credit loans are the most popular mainly because they are easier to obtain, and they don’t require credit check.
It is important to note though that there is no such thing as guaranteed bad credit loans offered to everyone who applies for one. Lenders, although they are targeting people with poor or no credit history, still have their own security measures in lending. This is why there are several types of bad credit loans available and each type is designed for certain needs and has a different set of requirements. Here is an overview of the most popular types.
Guarantor Bad Credit Loans
If you find it difficult to deal with banks because you have an unpleasant credit rating, you can go for guarantor bad credit loans. Guarantor loans, as the term suggests, require you to have a guarantor who is a homeowner with a regular income, or not a homeowner but have a good rating and have a regular income. In this case, your guarantor will be “responsible” for your loan in case you fail to pay for it. This type of loan may offer from $1000-$5,000, or to as much as $15,000. The good thing about guarantor bad credit loans is that they usually have lower interest rates.
Cash Advances/Payday Advances
Payday advances are the most popular service among those with bad credit due to the speed of the loan process. In fact, as long as you are qualified, you can get approval in as fast as 24 hours. As the term suggests, payday advances should be paid on your next payday. Thus, the payment term is short, ranging from days to a month, although some lenders allow up to two months. Unlike guarantor loans, payday advances do not require any guarantor. The most important requirement to get approved is to have a stable source of income and to show that you can pay for the amount you intend to borrow.
Installment bad credit loans are another type of unsecured loans you can obtain online. Like payday advances, installment loans for bad credit do not require any form of collateral. No credit check is also required to qualify. As the term suggests, installment loans are paid in an installment basis over a period of time. The repayment term usually lasts for as little as three months to as long as three years, depending on the size and your preference. The repayment term is flexible, making it a better option if you are looking for lighter monthly payments.
Although these types of bad credit loans vary in some degree, they all require no credit check, which is why they are so-called bad credit loans.