Often a financial crisis comes with the least amount of warning, causing mayhem to our delicately balanced budgets. Knowing where to get funds fast in these situations becomes essential. This can be seen as something of a problem for bad credit borrowers, but the good news is that getting unsecured loans with bad credit is a lot easier than they may think.
Traditional lenders have strict lending policies that make approval for those with bad credit ratings harder, but the rise of online lenders means there is an alternative source that is more accessible. Many online lenders do not carry out any credit checks when assessing a loan application, so while there is no guaranteed loan approval, it is not far from it.
However, there are loan criteria, so unless an application is properly prepared, the likelihood is that the lender with give the thumbs down. And while certain terms of an unsecured loan can be good, there are compromises to make too.
Unsecured Loans Are Accessible
There is a general expectation that getting unsecured loans with bad credit is pretty difficult, but some online lenders specialize in lending to bad credit borrowers. What this means is that there is a greater possibility of approval, and of terms that make the loan affordable. But this depends on the loan package sought – payday loans, for example, are very expensive.
When the loan sum required is larger, online lenders are more willing to make the lifetime of the deal longer, thus lowering the size of the monthly repayments. It also means more interest is paid but that is a small compromise to pay when the funds are needed badly.
Guaranteed loan approval is most likely when some security is offered as part of the deal. From the point of view of the lender, unsecured loans place all of the risk on their shoulders, so they are compelled to charge higher interest rates, and limit loan to low sums.
Offering Fast Loan Approval
The particular need for a cash injection can vary, but it is often an emergency that requires attention as quickly as possible. When seeking unsecured loans with bad credit, the approval process can sometimes be slow, with lenders checking credit histories, but some online lenders offer much faster loan approvals.
Normally, a fast period is considered to be 24 hours (something many traditional lenders promote) but that can be too late in some situations. Online lenders fall just shy of offering guaranteed loan approval, with approval offered in just minutes of submitting the application.
Meeting all of the basic criteria is necessary first, but once all the boxes are ticked, there is little reason is turn the application down. And when bank details are provided, unsecured loan funds can be deposited in the account of successful applicants as quickly as 2 hours after submitting the online application form.
Applying To Online Lenders
There are several advantages to applying to online lenders, not least the fact that terms are perfect for bad credit borrowers. Applications for an unsecured loan with bad credit are more likely to be approved, with the repayments more affordable and the funds accessed more quickly.
Certainly, there is no such thing as guaranteed loan approval, but meeting the required criteria is easier. The advantage to online lenders is that more people seek loans from them for these reasons, so they still make profits.
Sidestepping the issues that come with seeking unsecured loans, borrowers know they can access much-needed funds even if their credit history is terrible.