Seeking a loan to buy a new car or make a home repair? Need to borrow funds for your child’s education or advance your own career? Securing this type of financing can be a seriously challenging endeavor, especially if you have a shabby credit score.
Don’t beat yourself up about your credit score too bad. A 2016 report shows that about 51% of Americans have subpar or unfavorable credit.
A bad credit score doesn’t have to prevent you from getting a loan. Keep reading to learn about the best installment loans for bad credit or no credit consumers.
What Is an Installment Loan?
The first thing you need to know is what an installment loan is. An installment loan is a loan with a fixed interest rate, a fixed payment amount paid in specific intervals (or installments), and a payoff deadline. You can find them online or go to your local bank.
There are several types of installment loans. The most common kinds are auto loans, mortgage loans, and personal loans. Many people take out installment loans to manage debt, to cover emergency expenses, or for home remodeling.
Best Installment Loans for Bad Credit
If you need a loan and can’t wait to get your credit score up, there are some options. These are some favorable installment loans for those who have bad credit or no credit.
Payoff aims to serve consumers who need to lower credit card debt or other high-interest debts. The interest rates at Payoff start at 5.99% APR, and they don’t charge fees like prepayment fees, application fees, or late fees.
APR stands for “Annual Percentage Rate” which is the cost you’ll pay each year to borrow money, including fees, expressed as a percentage.
This installment loan comes with great perks like free FICO score updates, professional cash flow assessments, and quarterly check-ins during the first year.
On the flip side, Payoff often charges an origination fee of up to 5%. That’s a bit pricey, in my opinion.
Avant focuses on consumers who have fair and poor credit. Most of the customers who take this loan have credit scores in the 600-700 range. The interest rate starts at about 9.95% APR, a fair rate for a small loan.
Unlike other loan companies, Avant lets you make an initial application online and will not put a hard inquiry on your credit report. But, be aware of any administration fees, late fees, or dishonored payment fees.
Also, for consumers with the lowest credit scores, the interest rate tops out at 35.99%. That’s a sky high rate. So, look carefully at your quoted interest rate before you accept loan money.
3. Other Loan Originators
If neither of those companies suits your fancy, there are other loan originators to choose from too. Here are a few other loan companies to check out:
- Stilt Loans
- Possible Finance
Be sure to inquire about terms with several companies before making a final choice. You don’t want buyer’s remorse when it comes to installment loans.
Finding Installment Loans with Bad Credit
While you work to build (or rebuild) your credit score, you can’t let life pass you by. Make sure you only take out a loan that you can pay back, either on time or ahead of schedule. And of course, be aware of both your loan origination fees and ARP.
Good luck comparing the best installment loans for bad credit and acquiring one that is a smart fit for you.
*Disclaimer: Nothing in this article should be construed as financial advice. Before making any decisions, you should consult with a professional adviser, such as a financial planner or CPA. I have no financial relationship with any of the companies mentioned in this article.