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Can I Get An Installment Loan If I Have Poor Credit?

A bad credit installment loan is designed for borrowers who are denied bank loans because of poor credit standing. When you have default on debts or late credit card payments, you get negative remarked recorded on your credit report. This lowers your credit score and make it difficult for most lenders to approve loans because the chances of you not paying back is too high. You can only get high risk installment loans from lenders for people with poor credit. However, you have to contend with higher interest rates to compensate for the increased possibility of default.

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Even for bad credit loans, you can choose between secured or unsecured nonbank installment loans. If you are willing to put down collateral to secure a loan, it is easier to get cheaper loans and even some companies will approve long term installment loans with bad credit when you borrow against the equity in your car. However, such loans require more paperwork and asset appraisal for it takes a few days to process.

If you are in a hurry and need to borrow $2000 with bad credit, unsecured installment loans for 3 months are more suitable since no collateral is involved and many online lenders can instantly process your request and directly deposit the money into your checking account.

If you do not have any assets, you can still get an installment loan with bad credit as long as the loan is not much larger than your monthly income. For tenants or students, getting an unsecured loan may be the only option. However, you need to consider whether the high interest rates are worth the trouble. In fact, many borrowers end up aggravating their existing financial hardship due to the additional debts they now carry. For example, the average rate on legitimate installment loans for bad credit is at least 15 percentage points compared to banks or credit unions.

We have seen many consumers getting trapped in a spiraling cycle of debts. Due to the ease of getting poor credit installment loans online, these people start relying on easy loans for short term cash strapped situations instead of trying to build up a cash buffer in their banking accounts. Then, the expensive interest fees on high risk installment loans eat into their monthly income and makes it impossible to have any spare cash left at the end of the month. This cycle repeats until their overall debt becomes too large to be paid off on their own and they need to seek financial aid from friends and family.

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Instead of getting a poor credit installment loan, why not consider other alternatives to borrow money from friends or family. You can sell off some valuable items such as jewelry or watches, or even cash in your car. Doing so helps you avoid paying interest rates which are often unnecessary expenses. Budget your monthly expenses so that you can have some surplus for the savings account each month. If you have a good amount of cash in the bank for emergency situation, you will not have to borrow money at bad credit rates.

Always strive to maintain a high credit score or repair your bad credit standing. This will allow you to get cheaper loans from banks in future. Meanwhile, you can try to look for the best poor credit installment loans from online lenders by comparing quotes and rates for yourself.