It is a harsh truth that a credit score between 300 and 579 is considered poor. Now, it is challenging to search for loan providers who will lend you a loan with a poor credit score.
Do you know that there are loans for poor credit as well? Surprised? Yes, there are choices for you but of course, every unsecured personal loan with poor credit will have a very huge APR interest rate.
There are numerous loan providers that specialize exclusively in loans for poor credit. In simpler words, you can qualify for loans without any hassle with a credit score of 300 to 309.
Here are some of the loan options for you if your score is zoned under the poor credit:
1) Payday Loans
Payday providers do not consider your credit score while deciding if you are eligible for the loan or not.
These loans are typically for a short term which has a high fee. According to the Consumer Financial Protection Bureau, the fee of a payday loan (two-week) is calculated to almost APR 400%.
2 ) Car Title Loans
Car title loans are one of the short-term loans. This is also the best option for those with poor credit. Providers serve car title loans when a borrower uses his/her vehicle as security to the loan.
But these types of loans can be a bit risky! Because if you fail to pay back the loan on time then the provider can possess your vehicle. So it is very important to know it’s cons before selecting these loans.
Read More: Best Personal Loans For Bad Credit
3) Personal Loans
Personal loans can be both secured or unsecured. This is typically a type of installment loan provided by online lenders, banks and credit loans.
Personal loans are suitable for people with poor credit. But usually these types of loans have a higher rate of interest but it is cheaper compared to car title or payday loans.
4) Peer-to-Peer Lending
Peer-to-peer Lending is also known as P2P lending or marketplace. It is basically a structure wherein individual investors lend loans to various would-be borrowers.
The requirements of these loans distinguish but P2P providers won’t scrutinize your credit score closely.
5) Payday Alternative Loans
Payday Alternative Loans is also a type of short-term loan which is available at various federal credit unions. These offer comparatively yearly percentage rates & low fee than the normal payday loan.
Examine all the terms & conditions of each type of loan before choosing one. Prepare a perfect plan to pay it back.