Today, many individuals and businesses turn to online lending companies to borrow cash for important expenses. Online loans are different from the traditional loans offered by banks and credit unions. You can tell the difference by the marketing approach alone. Moreover, it’s easier to apply for the former because it’s online.
Another advantage that borrowers get from online loans is that credit checks are not that strict. So, if you have yet to establish your credit or you hold a bad credit score, there’s still a possibility of getting approved for such loans. You can qualify as long as you receive a steady income every month.
Throughout the internet, many lenders offer loans with lenient credit assessments. For example, you can check Crediteck for online loans. Here’s a list of different online loans that you should know.
Online Payday Loans
Payday loans are a pretty popular type of loan. Popular in the sense that many people apply for it and there are those who are against it. The latter argue that the charging fees and annual interest rates of this loan are too expensive. And, they say that lenders of payday loans operate without proper regulations.
Yes, some of the arguments against payday loans are true. However, let’s not dismiss the fact that it’s one of the most accessible loans today, especially for borrowers with low credit scores. Moreover, not all lenders of this form of short-term financing charge exorbitant fees and interest rates.
Check the regulations on payday loans in your state or locality to ensure that you know what to do and avoid when looking for such loans. Typically, there’s a limit on the amount you can borrow and the annual percentage rate of payday loans to ensure that borrowers don’t fall into a debt trap.
In most states, lenders can’t charge beyond the 35% interest rate cap, and borrowers can only borrow no more than $1,000 and are prohibited to take multiple loans at the same time. It’s a must to pay what you borrow on time to avoid additional charges and getting into a debt cycle.
Online Installment Loans
Online installment loans are another go-to type of money loan today. The good thing about this loan type is that you can pay back what you owe in monthly installments. The loan amount and its interest are split into smaller amounts and you need to pay it every month until the loan’s end date.
Moreover, online installment loans have lower annual percentage rates than payday loans. But you should keep in mind to make timely payments because you may incur extra charges if you get behind the scheduled payment.
And, yes, like the other loans on this list, online installment loans have an easy and simple application process. Lenders are also not that strict when it comes to your credit score. So, folks who have no or bad credit can avail of this loan type.
Peer-to-Peer or P2P Loans
If you want to try non-traditional loans, you should consider peer-to-peer lending. The money you borrow through this type of financing doesn’t come from a credit union or bank but rather a P2P network. It’s a network of people who are willing to lend you a sum of cash.
The main benefit of applying for a P2P loan is that you won’t need to go through a hard credit check and lengthy application process. Besides, you have more options when it comes to lenders in the P2P network. In this way, you can pick a lender that offers a better interest rate for your financial situation–such as medical debt.
Online Small Business Loans
Are you looking for funds to operate a small business? If yes, you should get an online small business loan. This type of loan is perfect to purchase machinery or inventory for your business endeavor. For borrowers with stable incomes, they can avail of this loan without going through a tough credit check. And, yes, the interest rates are not that expensive.
Struggle no more when it comes to borrowing money while having a poor credit score because guarantor loans are here to help you. However, to avail of this financing, you need to have a guarantor, who is an individual who pledges to pay your debt if you default on it.
This one is a disadvantage because it’s not easy to look for someone who can be your guarantor. But you can try reaching out to friends and family members with good credit scores to get this type of loan.
It’s indeed difficult to apply for a loan while your credit score is low. But there are online loan options that require no hard credit checks that you can try in this situation. Try applying for an online payday loan, online installment loan, online small business loan, P2P loan, and guarantor loan.