When you urgently need to borrow money fast, the last thing you want in your way are tight lending requirements. Unfortunately, this is the situation at many banks due to the poor economic conditions. What banks prefer these days are borrowers who are more likely to pay his debts on time every month, especially on long term installment loans such as auto loans or home mortgage. That means you should ideally have a high credit score, a stable and high income, low debt-to-income (DTI) ratio etc. I am not surprised if you do not qualify for all these lending criteria, simply because neither do I or many other people.
We do not advocate anyone to borrow money for speculative purposes, such as punting on stocks or going to the casino. The odds are stacked strongly against you and ending up in serious debts seems more likely an eventuality rather as a possibility. Otherwise, you can get any loan today for any purpose you have in mind - whether to consolidate high interest consumer debt, buy a new truck, do some long awaited home improvements, study for a college degree etc. These are major purchases that most people do not have the money to pay upfront, that is why banks and lenders offer 60 month installment loans. You can make small fixed monthly payments until your debt is cleared.
When Should I Get a Bad Credit Installment Loan?
There are times when it is not advisable to get a poor credit installment loan, even when there are many lenders offering favorable credit to us. For example, when you are already financially stretched with a debt to income ratio as high as 40%, you are at high risk of exacerbating your financial troubles if you choose to add even more debts now. It is better to pay off the smaller accounts are reduce your DTI ratio first. Or you really need a car for work, so considering leasing one or buy a used second hand car for cheap instead of purchasing the latest luxury European sedan. Saving up more money for down payment so that you reduce the total amount of money to be borrowed will save you a lot of interest costs on a 60 month installment loan.
Make sure you can afford the monthly payments on installment loans. These are long time commitments and if you fail to pay back responsibly, you will find it very difficult to get lenders to give you another loan in the near future. It is always easier to maintain a reasonable credit score, than to try and raise it to 700+ from a low of 500. Your cost of borrowing will also be exponentially higher when you have bad credit, which is something you must avoid.
What Do You Need to Get a $10000 Loan Cheap?
So with a good credit score, it is both easier and cheaper to get any type of loans today. The FICO credit scoring system is roughly weighed according to the following guess - your payment history (35%), existing amount of debt (30%), length of credit history (15%), types of credit used (10%) and new credit (10%). As long as you have been paying your debts regularly for several years, especially on home mortgage or car loans, your credit score should be quite decent unless there are reporting errors.
Even more important than your score is your employment history and income. After all, there is no point in having a 700+ credit score if you have been unemployed for months or years - the lenders will question how you are going to pay back the borrowed money. That is why people with temporary or part time employment find it hard to get a cheap loan. The same is true when getting a loan for self employed. This is especially true for 60 month installment loans since you need to pay back every 30 days for the next 5 years. Even those working under probation may get declined by banks when they ask for a loan.
The other requirements to get an installment loan for 60 months include your age (above 18), having a SSN, and a bank account in your own name. If you have been rejected for financing within the past 30 days for whatever reason, most lenders will also decline you again. Therefore, check your own credit report for any problems before you take the next step to avoid unnecessary delays.
