installment loans for bad credit
Sometimes life happens and it’s that one time peril where it may ruin your credit, however, one of many ways to improve your score is to obtain installment loans for bad credit. If your credit score is too low, lenders may not lend to you at all. You might want to consider a small secured loan, whether it is an installment loan or a credit card, either way having these tradelines report to your credit should help improve your score over time as long as you pay on time and with the terms of your agreement.
A low score suggests you are more likely to default on your loan. As a result, lenders might only offer you high-interest loans or they may require you to secure the loan against an asset of some kind.
Your goal should be to think of these short installment loans as a band aid to repair your credit. Don’t be discouraged if it takes a while to do your research and find one that meets your goals or if you get turned down by a few. Remember, there should still be options available to you to repair your credit. There are a lot of installment loans for bad credit available on the market, often from online lenders, but please remember to read the terms, this might take you a while to do but you do not want to put yourself in a worse situation.
An installment loan can be in the format of a “personal loan”, that you repay over a number of months – typically one or two years – rather than immediately. On the surface, this looks very similar to a credit card or any other normal personal loan. However, there are some important differences between those types of loans and installment loans for bad credit. You want to make sure how the interest is calculated, if it is simple or compounded interest. Credit cards are revolving lines of credit, meaning when you make payments, some of it should go towards the principal balance, in turn it should allow you to borrow the same principal back.
Usually, credit cards will have a higher interest rate and more restrictive requirements about how much you can borrow when compared to installment loans due to risk and depending on if it is secured or unsecured tradeline.
Although they may be more restrictive, these loans are a useful tool for people that want to rebuild their credit before buying a property. For example, by rebuilding your credit score, you might have more mortgage options and more cost savings available, your goal should be to have a few cards with a perfect payment history for 2 years.
If you are struggling with your credit score but you are hoping to sell your home and move, get in touch with Mortgage Quote . We can discuss your mortgage options with you so you can get prepared and even get pre-approved for a loan before you put your home on the market.
Installment Loans for Bad Credit