Where do you turn when you need extra cash but have problem credit? When you need money fast but have problem credit consider second chance loans.
Whether it’s extra cash to consolidate debt or finance large purchases an unsecured loan can help you reach your financial goals. Second chance loans offer people with problem credit an opportunity get back on track while getting the money they need fast.
Borrowers with good credit scores may have their pick of lenders but when borrowers have problem credit, the options are limited. There are several factors to consider with second chance loans including high interest rates along with loan origination fee and repayment terms.
If you are in the market for a personal loan, make sure you only borrow what you need and have the ability to repay any money you borrow.
Because second chance loans may have higher interest rtes, plan to pay off the loan early, if you can afford to do so, as that will save you money over the life of the loan. One other thing to consider is prepayment penalty: Make sure you the loan you choose does not have a prepayment penalty. The best loan deal, whether you have good credit or problem credit, is a loan with no prepayment penalty.
5 Second Chance Loan Companies
1. Best Overall: OppLoans
OppLoans offers online loans from $500 to $4,000. As of this writing, interest rates range from 99 APR to 199 percent APR. Personal loans are available with terms from up to 36 months. All loans have a fixed interest rate with a fixed monthly payment. All credit scores are considered.
Despite the high interest rates, OppLoans is at the top of our list because of its no prepayment fee and the fact that it’s available in all states. By repaying the loan early, you can avoid the high interest rate. Monthly payments are reported to the major credit bureaus. Making timely monthly payments can help build your credit.
OppLoans offers personal loans for any reason. The turnaround time is 1 to 2 business days. Once approved, money can be deposited directly to your checking account as soon as the next business day. That means if you are applying during a week day, you could have funds in your account, after approval, within 24 hours.
A soft credit check is performed to determine loan offer options. If you choose to go forward, a hard credit check is performed. Learn more.
2. NetCredit Loans
NetCredit offers online loans from $1,000 to $10,000. As of this writing, interest rates range from 34 APR to 155 percent APR (Varies by State). Second chance loans are available with terms from 12 months to 60 months. All loans have a fixed interest rate with a fixed monthly payment. Borrowers should have at least a 550 credit score, but all credit scores are considered.
Despite the high interest rates, NetCredit is on our list because of its no prepayment fee plus a few special features:
- Simple 5-minute application
- You’ll learn instantly if you’re eligible
- Customize your loan amount and repayment terms to best fit your needs
There are no late fees, though you should always make your full payment on time each month. Monthly payments are reported to Experian and Transunion credit bureaus. Making timely monthly payments can help build your credit scores.
NetCredit offers personal loans for any reason. The turnaround time is fast. Get money deposited directly to your checking account as soon as the next business day. That means if you are applying during a week day, you could have funds in your account, after approval, within 24 hours.
Get quote rates and terms during the pre-qualification process after a soft credit check. That’s just an inquiry and doesn’t hurt your credit; a hard credit check is an actual application for credit that may briefly ding your credit score by as much as 5 points.
NetCredit currently offers loans in the following states: AL, AR, AZ, CA, DC, DE, FL, GA, ID, IL, IN, KS, KY, LA, MI, MO, MS, MT, ND, NE, NM, OH, OR, SC, SD, TX, UT, VA, WA and WI. Learn more.
LendingPoint offers online loans from $2,000 to $25,000. As of this writing, interest rates range from 15.49 APR to 35.99 percent APR. Second chance loans are available with terms from 24 months to 48 months. All loans have a fixed interest rate with a fixed monthly payment. Borrowers should have at least a 600 credit score.
To qualify for a personal loan from LendingPoint, you must have a credit score of 600, no bankruptcies, charge-offs or liens in the past 12 months. You should have a minimum yearly income of $20,000 and be employed for at least one year.
Once approved receive funds in your account as soon as the next business day. Check your offer without affecting your credit score. When you apply, LendingPoint uses a “soft pull” of your credit history that will not affect your credit score. Once you choose one of the loan options, LendingPoint proceeds with a hard check to verify the information you provided. Learn more.
4. The Loan Exchange
The Loan Exchange offers online loans from $7,500 to $100,000. As of this writing, interest rates start as low as 16.64% APR. Second chance loans are available with maximum terms up to 15 years. All loans have a fixed interest rate with a fixed monthly payment. Borrowers should have at least a 500 credit score, but all credit scores are considered.
One of the biggest benefits of a Loan Exchange personal loan is that it can be used for college. The Loan Exchange is one of the few places where you can use your personal loan to cover educational expenses. You can borrow money for almost anything, including debt consolidation, home repairs, major purchases, vacations, moving, wedding, medical expenses and much more.
Because bad credit is okay, borrowers can get a second chance loan in a short amount of time. Typically you can get funds by the next business day or two. You can may be able to qualify for same-day funding if you apply early enough in the day.
Repay your loan early. Pay-off your debt sooner with no pre-payment penalties and a no-charge escrow process. Get a personalized loan offer with options and rates to fit your needs. Checking offers does NOT affect your credit score. Learn more.
BadCreditLoans.org connects you with a lender in its network of partners. Its network lenders have terms between 3 to 36 months and offer loans between $500 and $5,000. With easy eligibility requirements, you may be able to borrow money for a variety of purposes. There is no minimum monthly income required and no minimum credit score requirements.
BadCreditLoans.org can give you a second chance loan because they aren’t limited to helping only consumers with perfect credit. They have the resources to lend you a helping hand no matter if your credit is good or bad. Once you complete a short online application, you can get a personal loan offer in minutes from a network of lenders. Your approved loan can be deposited electronically into your checking account in as fast as one business day. Learn more.
Use second chance loans to get back on track
Personal loan options will have higher interest rates given your credit score but take the opportunity to use a second chance loan to improve your credit scores. Just like second chance bank accounts a second chance loan lets you prove how well you can manage finances.
Here are four ways you can use a personal loan to help rebuild your credit history:
- Monthly on-time payments. Make payments on time every month. You need to consistently pay on time. Set up automatic debits to ensure that you’re making those payments on time every month, and that behavior will count favorably toward your credit score.
- Consolidate debts. You can use a personal loan to consolidate credit card debt. If you use a personal loan to pay off credit card balances, that can help your credit utilization rate. Credit utilization rate is essentially amount owed. Credit utilization ratio on revolving accounts (credit cards) is essentially the percentage of your available credit you’re using. Using a high percentage of your available credit means you’re close to maxing out your credit cards, which can have a negative impact on your FICO Scores.
- Lower your interest rate. Depending on your credit scores, personal loan rates are generally lower than those associated with credit cards, so shifting debt from cards to a personal loan can lower your interest rate. This can make it easier for you to pay off your debt and improve your credit score as a result.
- Diversify your credit mix. The types of credit you have is one of the five factors that goes into determining credit score. Ideally, you’ll have experience with both revolving credit (credit cards) and installment loans (personal loans). If you don’t already have installment debt such as a mortgage or a car loan, using a personal loan to manage some of your debt would diversify your credit mix.
Building and improving credit is an ongoing process so while a higher rate interest loan is not the optimum strategy to rebuild credit, it might be your only choice.