Installment Loans For People With Bad Credit: Can They Help You Rebuild Your Credit?
Life constantly throws us curveballs. Your credit score may have been lowered in the past due to bad luck, poor decisions, or unforeseen situations. While there are various credit scoring methods, the FICO score, which is utilized by the top three credit reporting agencies, is the most prominent (Equifax, Experian and TransUnion). The FICO score goes from 300 to 850, with 850 being the highest possible score.
Bad Credit Installment Loans
Installment loans are growing more common, particularly among individuals with weak credit. Bad credit installment loans for which you can apply online at greendayonline.com assist borrowers with a variety of life needs, including:
- Automobile maintenance
- Bills for medical or dental treatment
- Travel or holiday gifts
- Expenses associated with a new birth, a divorce, or a funeral
- Expenses related to your job (electronics, tools, etc.)
- Home renovations and emergency housing requirements
- Expenses associated with school (tuition, laptop, supplies, etc. )
- Consolidation of debt
What Exactly Is Bad Credit, And How Does It Affect Me?
The lender and the type of credit you’re looking for will determine what constitutes a low credit score. Many home mortgage lenders, for example, consider anything below 620 to be sub-prime, while others consider 640 or 680 to be sub-prime. Sub-prime borrowers are those who have a blemished or limited credit history and pose a higher risk to lenders.
Bad credit has far-reaching effects that go well beyond what many people imagine, such as being denied a credit card or being unable to buy a home or automobile. Consumers with poor credit frequently struggle to:
- obtain contracts for cell phones
- student loans that are safe
- auto insurance at a low cost
- get a job
What is the significance of the employment link? According to a survey conducted by the Society for Human Resource Management, six out of ten private employers check the credit histories of at least some of their job applicants, with 13 percent doing so on all candidates to help prevent theft and gauge a candidate’s dependability, among other things.
Getting a Loan with Bad Credit
Borrowing even little sums of money can be difficult for persons with negative credit because their options are limited. Personal loans have traditionally been obtained from banks. If you have bad credit, though, your prospects of getting approved are slim. Even if you don’t have bad credit, getting a loan for a modest amount is unlikely because most banks won’t approve loans under $5,000 because they don’t create enough money.
So, what does this mean for people who need a loan for less than $5,000 yet have low credit?
What Is an Installment Loan, Exactly?
Simply put, an installment loan allows you to borrow once and repay over a predetermined period of time with regular, fixed installments (typically monthly payments that do not increase or decrease). Installment loans, whether you have good or terrible credit, offer a fixed interest rate and a fixed monthly payment depending on the loan total, interest rate, and time you have to repay the loan. This means that each payment reduces the amount of your original loan while simultaneously paying interest. Installment loans include things like home mortgages and auto loans.
Payday Loans vs. Installment Loans
Installment loans and payday loans are not the same thing. Installment loans, unlike payday loans, provide bigger sums of money and are also:
Refinancing is less difficult (based on a smaller principal and or for extended maturity)
A solution for long-term monetary demands that must be repaid in installments.
Installment Loans Can Be Beneficial For People With Bad Credit
It’s also worth noting that installment loans can help people with bad credit. Your FICO credit score is determined by several aspects of your financial history:
- Repossessions, bankruptcy, and late payments all lower this score by 35 percent.
- Debt Burden of 30% – Current amounts outstanding, number of accounts with balances, amount paid down, and so forth.
- 15 percent credit history length – average age of accounts and oldest account age.
- Credit Searches in the Last Year – 10% A high number of credit inquiries will lower your credit score.
- 10% Credit Varieties – Various types of credit are utilized, such as revolving, mortgage, installment, consumer financing, and so on. Higher credit ratings are associated with a healthy mix of different sorts of debt since it indicates that you are a well-informed and responsible borrower.
Installment Loans for Bad Credit Borrowers: Lender Selection Is Important
It’s easy to discover proponents and detractors of installment loans in today’s highly scrutinized financial industry. Installment loans, supporters believe, are a better option for bad-credit borrowers because, unlike payday loans, there is no final balloon payment that can force the borrower to incur even more debt. In addition, because installment loans can help you improve your credit score, they automatically garner favor with many financial professionals and consumer advocates.
There are, however, many detractors of installment loans and the companies that provide them. Predatory lending is unfortunately not new to the financial industry, which is just another reason why consumers should carefully examine and pick the lending organizations with which they interact.
Greendayonline: When Bad Credit Is an Issue, We Take a Different Approach to Installment Loans
Greendayonline is a leading provider of installment loans for those with terrible credit, with 279 loan offices across six states in the southeast. Greendayonline, unlike the impersonal online lending banks, has a history of being active in the communities we serve (mainly rural areas), allowing us to know and assist generations of families. In reality, our mission has been the same since 1941: to provide the respect and personal care that our friends and neighbors deserve when it comes to their financial requirements. Respect is a powerful motivator, and it’s what has led to the development of our installment loan products.
The following are some of the differences you’ll notice with a Greendayonline installment loan:
Participation from the community. All choices must be made at a local level because of our relationship-based financing methodology. That means your loan officer will be someone you see in the grocery store or at a little league game, rather than a faceless corporate decision maker thousands of miles away. Our leaders believe that having this level of personal connection allows us to make better installment loan lending decisions, especially when negative credit is a factor.
Transparency, quickness, and convenience of obtaining a loan are all important factors. It’s hard enough to get by sometimes; getting a loan with bad credit shouldn’t be one of them. We strive with you to make the procedure as simple as possible. There are no fees to begin, and we may have your funds in your account in as soon as 24 hours (excluding weekends).
Monthly payments that are predictable and help to develop credit. Our loans are not the same as payday loans, which are secured by your next paycheck. Greendayonline’s installment loans, whether for bills, necessities, or debt consolidation, help you save money and organize your finances by:
- Allowing you to make a single, affordable monthly payment.
- Helping you pay off your debt by focusing on the principal rather than just the interest.
- Allowing you to pay off debt faster than if you paid off various accounts separately (when used for debt consolidation).
- As you make on-time payments, your credit score will improve.
Fill Out An Application For A Installment Loan
While negative credit can make getting approved for an installment loan more challenging, Greendayonline makes the process simple. We can assist you whether you have unforeseen bills or just need a little extra help giving your family the Christmas they deserve. Simply fill out our online form when you’re ready to get started, and a local representative will contact you.