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What You Should Know About Bad Credit Lending


If you have a bad credit score, (630 or below), securing a loan to buy a home, a car, start a business or for some other common financial necessity, you can have a hard time finding a lender who will be willing to work with you.

What can be dangerous about having bad credit is, you may assume that if your credit is bad that no one will lend to you. Therefore, when someone with a credit score falling below 630 finds a lender who will work with them they may assume that their credit is not so bad after all. In this situation, a borrower is in danger of assuming they are getting a good deal, and not take a close look at the interest rate they are taking on.

Bad Credit Lending Candidates

This can be confusing as it is really those with no credit history who have the hardest time securing loans. You see, even people with bad credit have a history of making payments, whereas people with no credit are like a dark horse. Lenders just don’t know what to make of them, and they turn them away for that reason. Think of it like ‘stranger danger.’

People with low credit scores are often subjected to severe APR rates and fees by short-term lenders. Payday lenders are a good example of this and you should only work with these businesses under very specific circumstances. For example; when you need cash right away — and you are absolutely certain to have the money borrowed, plus interest, within the next two weeks.

So, you should know what your credit score means before accepting a loan offer. You should also have a good idea what a normal interest rate is for the type of loan you are taking on. Understand that having a low credit score means you will have to accept higher interest rates than someone with a high credit score. However, you should still know what a normal interest rate is for the type of loan you want, and for the credit score you have. This is the best way to ensure you are getting a fair deal and are not being taken advantage of.

There are some lenders, often found online, who will offer personal loans for bad credit candidates. These lenders can offer different levels of flexibility for those to whom they extend credit. Minimum APRs will vary significantly between these flexible lenders. This can make it difficult to comparison shop, as the disparities can be great — especially depending on the circumstances of the applicant. Borrowers with little or poor credit should expect to receive interest rates falling into the high end of a lender’s scale. This is known as “bad credit lending,” a type of lending that is often referred to as predatory lending.

Get Started with BetterLoanChoice

While it may be unfair to lump all lenders who offer these types of loans into the category of predatory lenders, some certainly do belong there. But the fact is, if you do intend to secure a loan with a poor credit score, you will have to accept stricter terms and a higher APR. The important thing to remember is that, by knowing what a normal APR for your credit score would be, the type of loan you are seeking, and your circumstances, you will be able to recognize when a lender is attempting to take advantage of you.

There are a number of reasons that people accept sky-high-interest rates when they could avoid them such as; holiday spending, gambling and shopping addictions, naivetyand desperate financial situations. If you feel pressured to accept an excessively high-interest rate, understand that there are many other lenders that may offer you a better rate. While the work of shopping around for a better APR can be stressful (if any of these conditions apply to you), remember that taking the time and putting in the work to find a reputable lender is well worth avoiding the long lasting damage that going with a predatory lender can cause.

Always read reviews for any lender, and check their standing with the BBB before you sign on the dotted line. For more information about the bad credit lending and obtaining unsecured personal loans, and to learn ways to secure the best interest rate for your credit score and borrowing needs, visit and also review the free, educational blog posts found at

This information was brought to you by BetterLoanChoice

Are you looking for a bad credit loan? Or perhaps your credit is in good shape and you just had an unexpected expense pop up? BetterLoanChoice is an online source to connect people of multiple credit types for personal loans with a lender. Our form is quick and easy. If you’re looking for a personal loan (no matter good credit loans or bad credit loans), click here to get started now!

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