Should you consider short term loans online for bad credit for your financial problems? Due to the uncertainties of life, your financial status can change any moment. A sudden emergency can leave you absolutely broke. However, if you are already living paycheck to paycheck without any considerable savings, you have to face much bigger troubles when an urgent expense crops up out of the blue. In moments of a severe cash crunch, a quick injection of funds can really help the situation. If you are in a similar situation and need instant funding, short-term loans may be the ideal solution. Here at LendingSumo, we specialize in short-term financing for bad credit lenders.
A quick overview of short term loans online for bad credit
Short-term loans, as the name suggests, are loans that have a shorter repayment tenure than conventional loans. Typically, a short-term loan reaches maturity and needs to be paid back in full (principal amount plus interest) within 6 to 11 months. Contrary to what many people believe, short-term loans do not exclusively mean payday or cash advance loans. There are different types of short-term loans online such as personal loans, payday loans, cash advance loans and installment loans. To put it simply, any loan that has a tenure of less than 1 year qualifies as a short-term loan.
Loans that have repayment terms ranging from 12 to 18 months or longer may be considered as mid-term or long-term loans. Some of the examples of these loans include business loans, auto loans, and home loans or mortgages. These loans may not be the right option if you are facing a short-term cash crunch. Loans with longer tenures tend to accrue a much higher sum of interest over the years. Even if you want to repay the loan before your tenure gets over, you might have to pay hefty prepayment charges. That is why if you are confident about paying the loan off quickly, you should go with short-term loans.
When searching for short-term loans online, you may come across options specifically designed for bad credit. If you have low credit scores, you might have had your loan application rejected several times. However, with bad credit short-term loans, your chances of finding the appropriate financing are fairly high. Here, lenders do not judge your creditworthiness purely based on your credit history.
Who should get short term loans for bad credit?
You might apply for a short duration loan when you need money urgently for a sudden expense such as vehicle repair or medical care. Because of the small tenure of the loan, you will not have to worry about being in debt for too long. You can simply repay the loan when you get your paycheck or when your cash flow normalizes. Having access to short-term loans means you can keep up with daily expenses as well as emergencies even when facing a cash crunch. Some people also resort to online short term loans for bad credit to repay other debts.
Short-term loans can be expensive and they usually come with steep interest rates. However, when used sparingly and wisely, short duration loans can be highly effective in helping you manage your finances even in difficult times. You just need to mindful about repaying the sum on time every time! Being responsible is the key to success when it comes to efficient debt management. You cannot be fully dependent on loans to sustain your business or run your household. Always borrow when facing severe financial challenges, and make sure that you stick to the loan terms. This way, you can avoid the debt trap and prevent your already dismal credit scores from decreasing even further.
You can apply for a short term personal loan when:
- Moving to a new house or apartment and paying the movers
- Getting essential repairs for your car
- Needing a rental while your car is at the repair shop
- Waiting for a delayed child support check
- Requiring to pay school/college tuition fees (especially when you cannot start your new classes or semester without paying the dues)
- Getting a health insurance policy or paying sudden medical bills
- Buying basic amenities and tools for your startup business
- Paying an unexpected and one-time fee for something important such as child’s school or tuition
There may be a range of other situations when applying for short term personal loans makes perfect sense. You should first analyze your needs and financial standing and think about whether or not you can repay the loan on time. This way, you will know whether or not taking out a short-term loan will be the right choice.
Popular sources of short term loans online for bad credit
If you have poor credit ratings, your chances of finding short-term loans from banks are already slim. Traditional lending institutions always look at your credit history to determine whether or not to lend you money. Therefore, if your scores are too low, your application will get rejected right away. Worry not! There are plenty of other sources that will provide you with the financial support that you need in desperate times. Online lending platforms, alternative lenders, payday loan companies, and pawnbrokers are some of the popular choices. You should, however, choose your lender carefully to avoid the risks associated with bad credit short-term loans.
Online lending platforms such as LendingSumo allows you to apply for short-term loans right from the comfort of your own home. We also offer a range of options when it comes to types of short duration loans. Unlike many alternative lending companies, we work exclusively with trusted direct lenders. That means we do not deal with brokers or third parties and thus we can get you the best deals at the most affordable rates. The involvement of third parties often increases the overall cost of the short-term loan. When working with LendingSumo, you do not need to worry about hidden charges or fees.
Can you get short term Loans with no credit check?
When looking for short term loans for bad credit, you might come across lenders who claim to provide short term loans no credit check with guaranteed approval. The words “no credit check” might sound incredible and even somewhat too good to be true to borrowers with poor credit ratings. However, you should know that there is no such thing as absolutely no credit check loans. Banks conduct what is known as a hard credit inquiry to judge your creditworthiness. Bad credit lenders, on the other hand, perform a soft credit check or soft credit inquiry to find the same information.
So, how is a soft credit check different from a hard credit inquiry? Well, both types of inquiries look into your credit report, credit history, and credit scores. However, banks rely on the three major credit bureaus, whereas alternative lenders depend on other sources. A hard credit check negatively affects your credit rating and it can reduce your scores every time a lender carries out a hard credit inquiry on you. A soft credit check does not have such adverse effects. That is the reason short term loan lenders rely on the latter to avoid damaging your credit ratings.
Without performing a credit check, a lender has no way of knowing whether or not you are capable of repaying the loan. A legitimate lender will always care about your repayment capacity. Only predatory lenders will avoid credit checks to get you into a debt trap. You should, therefore, avoid such lenders and only work with responsible and legitimate lenders and lending institutions that carry out soft credit inquiries.
Factors to consider when comparing bad credit short term loan offers
Finding affordable short term loans online for bad credit may be difficult. Most lenders charge steep interest rates and exorbitant processing fees for bad credit short-term loans. That is why you need to be thorough in your search and explore all the possible avenues before short-listing the ones that meet your needs. However, before making the final decision, you must compare all the options against various critical parameters. If you do not know what to look for in an ideal loan offer, start with the factors mentioned below.
When browsing through different loan options, you need to think about how much you want to borrow and how much you can borrow. Short term loans are known to be of small amounts. However, some lenders might agree to lend you higher sums if you qualify for the same. Typically, most short term loan lenders provide anywhere from $100 to $5000. You should borrow only as much as you need and can pay off within the specified loan term.
Some short-term loans such as payday or cash advance have the reputation for being too expensive. Typically, a short-term loan can bear steep interest rates. However, different lenders may offer varying rates depending on your creditworthiness and other factors. Here at LendingSumo, we aim at getting you the lowest interest loans. A quick comparison of the different offerings from the various lenders will reveal who is willing to offer you the best rates.
Additional charges and hidden fees:
The interest rate is not the only cost that you need to worry about. Lenders will also charge processing fees that will get added to the total amount that you need to repay. Sketchy lenders may also include hidden fees that you only get to know about when it is too late. You should read the fine prints of the loan documents carefully to find such hidden charges.
Loan tenure and repayment schedule:
Short term loans already imply that the tenure will be shorter than conventional loans. However, knowing the exact tenure is also important. See how many weeks or months you will get for repaying the loan. You should also find out about the repayment schedule. Would you have to pay the loan in full at once or can you repay in small installments every month? You should choose the loan term and schedule that fits your budget and repayment capabilities the best.
Penalties and prepayment charges:
What happens if you miss a payment or default on your payment completely? Even though you must be fully intent on repaying the sum on time, you should find out about the possible repercussions of not being able to do so. On the other hand, if you can gather enough money, can you repay the loan long before the tenure gets over? Many lenders impose hefty prepayment penalties. Find out what policies the potential lender has regarding this.
Every lender has some requirements that you need to fulfill to qualify for their short-term loans. Checking the basic eligibility criteria before applying for the loan will surely help you to shortlist the possible lenders. However, once the lender provides you with an offer, you should see if you are eligible for that particular loan. For example, is the loan ideal for retired individuals or students or borrowers with high credit scores?
Customer reviews and ratings:
This one applies to both choosing a short term loan and the lender. Before selecting a particular loan product or lender, you should go through the provider’s website or carry out an online search to see if they have received good customer reviews. This step will let you know how other borrowers feel about the loan or the lender. You should, of course, stay away from lenders and loan products that have received terrible reviews and ratings from the customers.
Due to some sketchy lenders, alternative loans can be risky. That is why you need to maintain caution and take the necessary steps to ensure that you deal with a legitimate and established lender who will offer you affordable loan deals.
How to get short term loans online for bad credit from LendingSumo?
LendingSumo is a reputed online lending platform, specialized in short-term loans online. We deal with established and trusted direct lenders who can offer you the most competitive rates. To apply for a short duration loan with us, all you need to do is submit your application by filling up a quick form online. Once you get our quick response, you will know that we have started processing your application. After going through your profile, we will match you with the best direct lenders.
Once you compare the different offers put forth by the direct lenders, we proceed with the rest of the formalities of approving your application. With our same day approval schemes, you stand to get an instant decision from our lenders. Once the loan is approved, we transfer the money directly to your bank account. You may even get the money within the next day of submitting your application. Check out our online application form today!