We have all found ourselves in a financial bind at least once in our lives, if not more. There are many things that can occur on a daily basis that can impact your financial situation and leave you needing money. The loss of a job, a car accident or any other type of unexpected emergency or expense can leave you in a situation where you need extra money, or a loan, to get back on track. There are many different options for consumers when it comes to getting loans. There are short term loans, long term loans, secured loans, and unsecured loans. First, let’s review the different types of loans available and then we will look at what option is best for your situation. Short term loans are loans that are usually repaid anywhere from two to eighteen months and long term loans are loans such as a mortgage or car loan which are paid back anywhere from two to thirty years. Secured loans will require collateral and you will usually see these types of loans with mortgages and car loans and they use the home or automobile as the collateral. Unsecured loans, or personal loans, do not require collateral and are based on your credit and your ability to repay the loan.
What If I Have Bad Credit?
There are many different lenders available for short-term unsecured loans and often they will not go strictly on just your credit score. They will look at several other different factors such as you’re currently employment and employment history and your bank account status. Often they will ask you for your current employment information, and they usually verify it by calling your employer, and they will also ask for your most recent check stub. If the loan amount you are asking for is higher than five thousand dollars they will sometimes check your previous employment history to validate your stability. Next, you will be asked to confirm and verify you’re banking information by providing them with three consecutive months of bank statements. They want to see that you have successfully maintaining a bank account and they are also going to want to set up your payments to automatically be drafted from the account.
How Long Does The Approval Process Take?
There is no definite answer to this question but the quicker you can get them all of your information the quicker you can get approved. Usually, this takes two to five days and then once you are approved you can get the money deposited into your account within two business days. You will want to make sure that you give them the most accurate information as possible when you are filling out the loan application because this will help speed up the process.
Are the Interest Rates High?
Short-term unsecured loans will have a higher interest rate than traditional bank loans but if your credit isn’t over a 700 then the lender is taking a higher risk giving you the loan and therefore the interest rate will be a little higher. However, when you need money to help you in a bad financial situation a little higher interest rate is worth it because you probably won’t be able to get a traditional bank loan with a credit score that is anything less than perfect. Always remember to only borrow what you can afford to repay. Paying your loan on time will definitely help your credit score tremendously but if you fail to repay the loan it will make your credit score go even lower and you won’t be able to get another loan for a very long time.
