Loans For Bad Credit

Bad Credit Loans Online at GreenPlaceLoans

If you have bad credit, or even if you simply haven’t yet established a credit history, you may feel like “the key is in the safe.” You need a loan to establish good credit, but you need good credit to get a loan.

This is not true. It is possible to get a loan when you have bad credit or no credit history.

There is a catch: They charge higher interest rates than loans marketed to people with good credit scores.

bad credit loans

Lending Is A Business

If you are young and financially inexperienced, you may find yourself feeling like there is something inherently unjust or unfair about charging high-interest rates to someone in a financial pickle. But you have to remember this is a business, not a charity.

Let’s take a minute to look at this from the business end of the equation.

You are not the only customer a lender has. They lend money to many people. So they do a lot of fancy number crunching to figure out how to do what they do and make enough profit to stay in business.

A lender who will only lend money to people with good credit can afford to charge lower rates. If they lend money to 100 people and 98 of them pay it all back on time and in full, they only need to pay their interest a small amount to cover the 2 people out of 100 that they expect to default on them.

Bad credit loans have higher default rates. If you lend money to 100 people and only 90 of them pay you back, now you have to cover losses on 10 out of 100 loans.

This may not sound like that much. But if you think it isn’t a big difference, then you don’t really understand statistics that well.

To be fair, most people don’t understand statistics. So let’s go over some basics here.

First of all, it’s painful for the lender because the difference between 2 out of 100 people defaulting and 10 out of 100 people defaulting is a five-fold difference. Ten people are five times as many people as two people.

It’s really quite a lot. It’s a very big difference for the business.

Second, the higher default rate means you have to cover more losses from a smaller pool of paying customers. It isn’t simply that eight more people are defaulting. It is also that eight fewer people are paying.

The pool of money that you are getting to cover all your business expenses, including employee salaries and other operating expenses, needs to somehow be covered by a smaller pool of borrowers. At the same time, that smaller pool needs to cover loan losses that will be written off.

This is why the interest rates are so very much higher on bad credit loans. The difference in the amount they need to make on each loan that actually gets paid back is quite large.

You can think of it as a kind of gambling. They are placing a bet on you and you aren’t really a good bet. Long shot bets always come at a premium.

If you think someone should do something nice for you because you are in trouble financially, that is called charity. Lenders are not charities. They are businesses.

Financial Responsibility And Your Life

If you are in so much trouble that you really think you need charity, then maybe you shouldn’t be thinking about getting a loan. Or if you are just in a snit and feeling like “That’s somehow wrong!” and you object to participating, you can go look for freebies.

Here are some things you can look into to try to cover your needs without borrowing money:

  • Call 211.
  • Call local churches and ask what programs they have.
  • Ask a friend or relative for a gift of cash.
  • Go to your local welfare office and apply for benefits.

If you call 211, it should be a free call, even if you are calling from a pay phone. You can also check out their website.

Whether by phone or online, this is an organization that helps you find things like soup kitchens, food pantries and other free aid for needy people. They will help you figure out what resources exist in your local geographic area. (Depending on where you live, sometimes the answer is “Not much.”)

However, they may not know about local church programs. A surprisingly high number of churches have limited programs, such as a free weekly meal. (Keep in mind that the price of admission is probably sitting through a sermon.)

These programs are often not well advertised. If you are really desperate, you may be able to cobble together a list of free meals and other small help that can help you make it through the week.

If you have friends or relatives that regularly give you gifts, you may be able to ask for a gift from them to help you out. It may go over better if you frame it as an early birthday present or early Christmas present.

If you expect this to be an ongoing issue for the foreseeable future, you can apply for welfare benefits, such as food stamps. It’s a bureaucratic process and can take a while to get results. You may need other help while waiting to be approved, so you may also need to look for free meals and the like.

Beggars Can’t Be Choosers

The catch to all this “free” help is that you don’t have a whole lot of control over what you get. That reality is often summed up with the phrase beggars can’t be choosers.

If you have the cash to buy a meal, you get to decide where to eat and what to order. But if you go to a free meal site, you will be eating whatever they are serving or going hungry.

Free meals also are served at a specific time and place. If that doesn’t fit your schedule, too bad, so sad. No dinner for you.

With cash, you can go buy groceries and eat them whenever you feel like it. Or you can go to an eatery at almost any hour of the day and order a meal.

Getting Money

Maybe free meals and other forms of aid aren’t the happy solutions you imagined they should be. Let’s talk about getting money.

Aside from borrowing it, there are basically two other (legal) ways to get money: Sell stuff or work for money.

Yeah, okay, you could do something illegal, like steal it. But that’s not in your best interest in the long run.

It’s also something we can’t help you do! Telling you how to break the law can land us in trouble.

So, we are talking about what you can do legally here. Plus, we are talking about things you can genuinely act on, not things that fall under the heading of wishful thinking.

Of course, you could play the lottery, hope for a random windfall out of the blue or similar. But such ideas tend to all be wishful thinking and not something where you can make a plan, put in some time and effort and count on it leading to money.

Selling Stuff

If you are in a financial pickle but used to have more money, you might have a mountain of personal possessions. You may be able to sell some stuff to help you in the short term.

However, there are probably limits to how much you own. At some point, the only real answer is earning more money.

Earned Income

In the long run, improving your earned income should be a large part of your plan to resolve your financial problems. The problem is that it tends to take a long time to develop a better income.

Here are some relatively quick sources of earned money that may help you in the short run:

  • Collect recyclables.
  • Do odd jobs, like babysitting.
  • Take up gig work.

It isn’t a bad idea to keep your own cans and bottles, rinse them out, store them and return them. It might be around $10 or $15 per month. It’s not going to pay your rent, but it can help ease your cash flow a smidgen.

Coming up with a source for a large number of recyclables that will really make a dent in your financial problems is not that easy. In reality, if you find a large pile of them somewhere and clean it out, it probably won’t be rapidly replenished.

Trying to find odd jobs tends to involve a whole lot of ongoing time and effort. If it isn’t something you are already doing regularly, you probably can’t magic up an odd job today for your immediate financial needs.

Gig work has similar challenges. It may help you access relatively quick cash compared to a regular job, but it probably won’t pay you today, plus it can take time to get established.

This is probably a more mid-term solution, not an immediate solution to a financial crisis where you need money right now. Real solutions tend to take time.

The desire to “borrow your way out of debt” or win the lottery or similar is rooted in a desire for a no-strings-attached quick fix. It’s basically wishful thinking.

Life mostly doesn’t work that way. If you are reading stories about people who inherited money out of the blue and hoping you are next, keep in mind that this is not something likely to happen and it is not something you have control over.

Finance For Grownups

There is a saying: “There is no such thing as a free lunch.” In other words, even a free lunch comes with a catch of some sort.

It may be time for you to get over ideas like “the world should just be nice to me and give me what I need.” That will not get you a secure, middle-class lifestyle.

The way to get a secure, middle-class lifestyle is to behave like a grown up. That involves two things: Taking responsibility for your life and making more money than you spend.

Whether you simply aren’t yet established or are starting life over after things went sideways, a bad credit loan may have a valid role to play in creating a better future for you. If you will take the time to learn how they work and when they are appropriate, you may be able to get the cash you need today without sabotaging your long-term financial future.

Bad Credit Loans

We have already covered the fact that bad credit loans will charge higher interest than other loans. But that is not the only difference.

Another difference is that they tend to not use hard credit checks. There are a couple of ways around such.

Secured Bad Credit Loans

One way to get a loan with bad credit is to use collateral to secure the loan. In other words, you attach a thing of value to the loan that the lender gets to keep if you fail to pay.

This helps make it less risky for the lender, which makes them more willing to agree to lend you money. It also means they can lend you money on the strength of the value of the item, potentially without running a credit check at all.

There are actually secured loans at all credit levels. A mortgage on a house is a form of secured loans that middle class or upper class people routinely use.

But if you have bad credit, you are probably talking pawn shops or maybe a title loan. Pawn shops will lend you a few bucks for a small item of value, such as jewelry. You can only get a title loan if you own your vehicle free and clear and are not still making payments on it.

Soft Credit Check Bad Credit Loans

You can also get an unsecured or personal bad credit loan. They won’t run a hard credit check, but will probably run a soft credit check.

Hard credit checks can negatively impact your credit score for up to two years. If you are trying to establish credit, this may be undesirable.

It also may be undesirable if you have a big financial goal, such as purchasing a new car or buying a house. You may be trying to clean up your credit score for purposes of getting a better rate. A better rate on a large loan can save you big bucks in the long run.

If you want a more in-depth explanation of hard versus soft credit checks, you can read this. It will cover what they each are and how this impacts your credit score.

A soft credit check loan may be a means to help you establish a better credit score. They have a low barrier to entry and won’t run a hard credit check, installment loans can appear on your credit history. Paying them on time and in full can help you establish better credit.

The Importance Of Good Credit

We’ve actually already talked about one of the most important reasons why a good credit score matters, but let’s say it again: A bad credit score costs you money in the form of higher interest rates. So, obviously, a good credit score saves you money by getting you access to loans with better rates.

But there is a lot more to it than that. These days, credit scores are being used for a lot more things than just credit.

Landlords, insurance companies and more are increasingly running credit checks as a means to check on your general reliability and trustworthiness. These days, a credit score is a de facto cornerstone of your public reputation.

Part of the reason for that is ongoing trends in urbanization. We no longer live in small towns, so we no longer know all our neighbors. Conversely, they don’t know us either.

These days, more than half the world lives in an urban setting. In 1900, only 16 percent of the world’s population was urban.

There are both good points and bad points to that. About thirty years ago, it was difficult to cash a check if you were from out of town. No one knew who you were or trusted you.

We are an increasingly mobile society. This requires new ways to establish who we are and how much we can be trusted for myriad aspects of our life, from getting home to dating to borrowing money.

Our world is far more complex than it used to be. This comes with a lot of goods, services and opportunities that the world has never seen before.

It also comes with a cost. In a nutshell, you need to learn how to interact effectively with this complex system. That takes time and effort.

Understanding your credit score and how your choices and behaviors impact that score is one of those things. As with most things, that is a two-way street.

So you also need to understand how it impacts your life. You can read a bit more about that here.

Some Basics

Your financial life is not just a product of your choices, it is also a product of the larger world around you. If you currently don’t have great finances, you are hardly alone.

A 2017 study found that most Americans don’t have enough savings to cover a $500 unexpected emergency expense. So, to some extent, it’s not you. It’s just the state of the world.

So you probably shouldn’t spend too much time feeling guilty about it. But you also shouldn’t err too much on the side of blaming the world. That won’t fix your problems.

Here are some truisms that can help you start overcoming those problems:

  • Knowledge is power.
  • People who set goals outperform those who don’t.
  • If you want financial security, you need to spend less than you make.

No matter how little you currently know, you can learn more about money and how it works. The more you know, the better off your will be.

Financial literacy can be worth big bucks over the long haul. It can help you save tons of money, make tons of money or both.

You should set financial goals. One study found that the two percent of people who set financial goals outperformed the 98 percent who didn’t combine.

Whatever your income, you need to find ways to spend less than you make. Make this a habit and stick with it.

The reality is that a lot of people who make good money also run through it. If you do a quick search, you can probably find a list of big-name celebrities who recently declared bankruptcy.

Living the high life doesn’t give you financial security. Instead, financial security is about what you manage to keep, not how much you made.

Some portion of that is about making enough money, but some portion isn’t. No matter how much you earn, it is possible to live beyond your means.

Get Started

A bad credit loan can be the first step to building a better credit rating. It can do so while getting you funds you need quickly to deal with something life recently threw at you unexpectedly.

You can use an online loan matching service to help you find a loan that will work for you. Also, you should gather a few important documents, such as a valid photo ID and a recent bank statement.

Some additional documents may be required but start there. You will certainly need those items.

You need to know how much you want to borrow. This should be based in part on what you are trying to accomplish and in part on how much you can afford to repay.

An installment loan is generally going to have a lower Annual Percentage Rate (APR) than a payday loan or a title loan. It also can be gotten with a soft credit check and can be accessed via an internet application and direct deposit to your bank account.

Pawnshops don’t work that way. In order to borrow money from a pawn shop, you have to go in person with the item you wish to pawn. They also cannot help you improve your credit score.

Online personal loans can be one of the most convenient means to find a bad credit loan for which you qualify and which can help you start improving your credit score. We can help you find the right one for your needs.

Once you have gathered together some basic documents, just click the “GET STARTED” button to start your application process. You may be able to get the funds directly deposited into your bank account in as little as a day or two.

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