Having poor credit may seem like an obstacle for borrowers who need money fast. But luckily, there are many lenders out there with less strict credit score requirements. Cash advances and installment loans are two easy loans that can get you quick cash, even if you have poor credit. Let’s dive deeper into how cash advances and installment loans work to help you decide which option is the right fit for you.
What is a cash advance?
A cash advance is a short-term, small-dollar loan that you can take out to cover expenses before your next payday. These loans are a good option if you need a small amount of money right away. The application process is easy, and the funds will usually show up in your bank account within a day after you’re approved for the loan.
Although it may be tough to find a cash advance with no credit check, many cash advance lenders have less strict credit score requirements. They’ll consider factors like income and employment history in addition to credit score. This means you can still get approved with poor or fair credit. But keep in mind that interest rates for these loans can be higher, so make sure you have a good repayment plan before filling out an application.
What is an installment loan?
An installment loan is a short-term loan that can give you a lump sum of money. Then, you’ll repay the loan over time in fixed monthly payments, or installments. Repayment term lengths for installment loans can range from a few months to a few years. These loans can be a good option if you need a higher loan amount.
You can get an installment loan by searching for lenders that offer loans designed for poor-credit borrowers. By comparing loan rates and terms, you may be able to find a loan option that works for your needs.
Why does your credit score matter?
The credit scoring system is the primary measuring tool used by lenders to determine a borrower’s creditworthiness. On the FICO Score scale, a credit score of 580 or lower is considered poor credit. Applicants at or just below that range can still get approved for a loan, but they may have to pay higher interest rates and receive more limited terms.
On the flip side of that, applicants with higher credit scores can expect a lower interest rate and more agreeable payment terms. That’s why your credit score is important. The good news is that taking out a poor-credit loan can help improve your credit if you make consistent on-time payments. This means you may be able to qualify for a loan with better rates and terms in the future.
The bottom line
To decide which poor-credit loan is right for you, consider your financial needs. If you only need a few hundred dollars to hold you over until payday, then a cash advance may be the right option. This type of loan can be great for covering day-to-day expenses, like groceries and bills. But if you need a larger sum of money that you can pay back over time, you may want to consider an installment loan. Installment loans can work well for borrowers that need to cover larger expenses like medical bills, car repair bills, and home improvement projects. Whichever loan you choose, spend some time shopping around online to find an option that works for your budget and needs.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.