Struggling with bad credit and need a personal loan? Unsure of how to navigate the lending landscape? Want to know the lenders who can help?
This article will guide you through the process of securing a personal loan of up to $35,000, even with bad credit.
You’ll learn about the alternative credit landscape, explore various lenders offering personal loans for bad credit, and understand the types of no-proof of income loans. Let’s dive in!
Understanding the Credit Landscape
Before diving into the specifics, it’s important to understand the credit landscape. Traditional lenders like banks often rely on your FICO score, a measure of creditworthiness.
However, many alternative lenders use third-party companies owned by credit bureaus, such as Clarity (owned by Experian), CoreLogic, Teletrack, DataX (owned by Equifax), and FactorTrust (owned by TransUnion).
These systems track your financial data, including past loans and repayments, providing a more comprehensive picture of your financial behavior.
For example, if you’ve taken out a personal loan before and repaid it promptly, these systems will reflect that positive behavior, potentially making you more attractive to lenders.
Lenders Offering Personal Loans for Bad Credit
Several lenders offer personal loans to individuals with bad credit. Here are a few options:
VA Financial
Specifically for veterans, VA Financial offers loans up to $40,000, even with bad credit. They also provide business loans up to $350,000. This is a great option for veterans who may have faced financial difficulties but have a stable income source.
Universal Credit
This lender offers loans up to $50,000 for individuals with bad credit. Universal Credit is a good option for those who have a steady income but a low credit score due to past financial mistakes.
PersonalLoans.com
An online lending platform, PersonalLoans.com offers loans up to $35,000. This platform is ideal for individuals who prefer the convenience of online applications and quick approval times.
5K Funds
A new entrant in the market, 5K Funds offers loans ranging from $100 to $35,000. This lender is worth considering for those who need a smaller loan amount.
Avant
Avant offers loans from $2,000 up to $35,000. Avant is a good choice for individuals who need a moderate loan amount and have a consistent income source.
LendingPoint
This lender offers loans from $2,000 up to $36,500. LendingPoint is a good option for those who have a steady income but a low credit score.
Upstart
Upstart offers loans from $1,000 up to $50,000. Upstart uses artificial intelligence to assess credit risk, making it a good option for those with a thin credit file.
Understanding No Proof of Income Loans
There are four categories of no proof of income loans: Stated Income Stated Assets (SISA), Stated Income, No Income No Assets (NINA), and No Income Verified Assets (NIVA).
Stated Income Stated Assets (SISA)
This category is for individuals who run a business but don’t have personal income. Lenders may require 12 months of bank statements as proof of income.
For example, a small business owner might not draw a regular salary but has significant business revenue.
Stated Income
This category is for individuals who earn income through tips and gratuities, such as waiters and bellhops. Bank statements serve as proof of income.
For instance, a waiter might not have a high base salary but earns significant income through tips.
No Income No Assets (NINA)
This category is for seasonal workers, independent contractors, or self-employed individuals. Proof of income can include bank statements, 1099 forms, and profit and loss statements.
For example, a freelance graphic designer might have fluctuating income but can demonstrate consistent earnings over time.
No Income Verified Assets (NIVA)
This category is for retirees drawing money from 401k, annuities, or rental income. Proof of income can include documents showing these income sources.
For instance, a retiree might not have employment income but receives regular distributions from a 401k or rental property.
Title Loans as an Alternative
Title loans offer another avenue for securing funds. Lenders can loan up to 30% of the equity in your car.
This option can be beneficial for those who own a vehicle and need immediate funds. For example, if you own a car worth $10,000 outright, you could potentially secure a title loan of up to $3,000.
Frequently Asked Questions
How to get a large personal loan if you have bad credit?
Getting a large personal loan with bad credit involves several steps. First, [check your credit score and credit reports](https://www.annualcreditreport.com/index.action). Ensure your monthly payment fits into your budget.
Compare bad credit loans from your local bank, credit union, or an online lender. Get prequalified and consider secured loans or adding a co-signer if necessary.
Gather your financial documents and be prepared for a hard credit check. Some lenders, like Avant, don’t have strict credit score requirements.
What’s the monthly payment on a $35,000 loan?
The monthly payment on a $35,000 loan depends on the payoff period and the Annual Percentage Rate (APR). For example, with a 15% APR, the monthly payment would be $3,159 for 12 months, $1,697 for 24 months, $1,213 for 36 months, and $974 for 48 months.
How to qualify for a $3,000 loan?
To qualify for a $3,000 personal loan, you typically need a credit score between 610 and 640 for an unsecured loan (a loan with no collateral). The higher your credit score, the less interest you will pay.
What credit score is needed for an instant loan?
To get approved for a personal loan, lenders typically look for a CIBIL score equal to or above 750. The first thing a lender does is check your CIBIL score as soon as they receive your personal loan application.
Conclusion
Securing a personal loan with bad credit may seem daunting, but it’s not impossible. By understanding the credit landscape, exploring various lenders, and knowing the types of no-proof of income loans, you can navigate the financial landscape and secure the funds you need.
Always remember to do your research and consult with a financial advisor before making any financial decisions.
