When you need a $3,000 installment loan, an amount that is larger than your monthly income, you usually need a long time to pay back in full. Most lenders give unsecured long term loans for bad credit up to 60 months. That means you only pay around $500 excluding interest per month. The smaller monthly amount helps to avoid the risk of late payments, so that you can gradually improve your credit score. With some luck, when you have fully paid off the loan, you should have re-established good credit and eligible for cheaper financing from banks.
While legitimate loan companies provide reputable guaranteed monthly cash loans for people with no credit or collateral, you do need to have a job or income to qualify. This is the main requirement for borrowing money despite bad credit. Just find a job and you can submit your pay stub for verification with the lenders. To check whether you qualify for a loan while collecting benefits, fill out and submit this online application form for free.
Long term bad credit loans have been around for decades, and the installment plan is similar to a car loan or home mortgage. The only difference is that home loans and car loans are secured, so you can still get financed easily with low FICO credit scores. If you stop the payments, the lenders can simply repossess your home or car to get back their money without making a loss. However, unsecured personal loans are a different matter.
While you can easily get online cash advance approved without employment verification, they are only good for small loans. For high risk borrowers that need financial help to consolidate their high interest credit card debts, a real $3000 loan with low monthly payments can save you thousands of dollars. If you can provide collateral to secure the loan, this is highly recommended since you get the best loan rates even from banks.
High risk unsecured installment loans for people with bad credit will have higher interest rates, so you need to justify whether it is worthwhile to do so. Cheap bank loan APR advertised on the newspapers are only applicable when you have high 700+ FICO scores or from home equity loans. You may feel that bad credit loan companies are exorbitant, and if the costs are too high for you, simply refrain from borrowing money. Work on improving your credit score instead.
However, some people may have other debts that cost them 25% interest while the best installment loans for bad credit are available at 20% interest, you can save that 5% which is very substantial when applied over several years. You can become debt free faster and increase your credit score at the same time.
Many people are surprised to find that their FICO score improved when they are paying off their unsecured long term loans. Lenders prefer borrowers that pay back on time, which is why you can restore your credit score if you are no longer late on payments. In probably less than 6 months, you can get low loan APR from banks and credit unions. This is the time to get a cheaper bank installment loan and pay off your current one. See the trick?
It is easy to say that banks will not qualify you for a bad credit long term loan, even if you have high income. Now, credit unions are also tightening the credit requirements for large installment loans unless you have collateral to secure the lending. Thus, non-traditional lenders become the best place to get big money loans for borrowers with bad credit. With more and more lenders coming to offer bad credit installment loans, borrowers can now get more competitive rates.
There are a few things to keep in mind when you are trying to find lenders that give long term installment loans you can pay slowly. Firstly, unsecured loans comes at high interest rates, around 400% APR if allowed by the laws. Not every borrower will pay back the loan in full, that is why the lenders are charging expensive interest fees to offset their losses on some accounts.
Secondly, use an established loan broker to help you get the best long term loan rates. If you apply at every lender, there will be multiple credit checks made on your profile at the same time and this can reduce your FICO score. Let the loan broker retrieve your credit and match you to the best lender for a instant decision installment loan.
Thirdly, verify the legitimacy of the lenders you intend to use. Check the Better Business Bureau directories for customer feedback as well as online forum chat boards for any complaints of hidden fees or unethical practices. Otherwise, choose a well established online loan company for long term loans when you have bad credit.
Lastly, plan how you intend to pay the loan installments every month on time until you are debt free. Is the money coming from your paycheck? Make sure you do not use the money that is meant for payments. Most licensed and legit companies will verify that you have at least 90 day employment history with your current employer, although some lenders give loans to the unemployed, but at higher interest rates.
In the end, it is up to yourself to make good on a long term installment loan on bad credit. If you can manage the risks and costs as well the legal consequences of defaulting, there is still the total wreckage on your credit history to deal with. Note that you can still get a low fee $3,000 monthly payment loan with bad credit does not mean the lender totally believes you can pay up on time. There might be a glitch or hidden purpose you are not aware of. Just be prudent with your money, especially borrowed funds. Naturally, the smaller your loan amount, the easier you can pay it back on time.
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