Question: We're coming into a long weekend starting tomorrow and I need to get a $500 loan today. I know that approval takes a while but I need the money as soon as possible. What's the fastest way to get a loan application started and hopefully finished today? The problem is that I know it'll take even longer, because I have bad credit and I don't know if a bank will approve me so I'll probably have to try more than one place.--Rich (not)
Answer: Even when banks are closed, online lenders accept applications. If you need to get approved for a loan today, with as little hassle as possible, you can find many lenders who are more forgiving of poor credit compared to banks. With online lenders, you can apply using a secure form and as long as you meet minimum requirements, a $500 loan may not even require a credit check.
For example, at this company, you might be able to receive a loan up to $1000, even if you have no credit history, poor credit history or a bankruptcy in your past, as long as you have a job or other source of income and a checking account.
When the economy is doing poorly, banks become more conservative and are less likely to approve customers who have marginal or bad credit. Other lenders are more understanding, and realize that there are people who have had financial problems in the past, yet still face emergencies when they need to borrow money.
You can apply today at an online lender and receive approval quickly, often within minutes or hours. The $500 loan will be electronically transferred to your bank account, usually on the next business day. The disadvantage is that lenders who cater to those with poor credit are taking more of a risk, so the costs are higher. Once your credit improves, a bank loan will be a less expensive choice, but that may not currently be an option.
Online loans may be payday loans, which are due in full on your next payday, or may be short-term installment loans which you can pay back over several months to a year. Even payday loans may often be extended if at the borrower's request, if he or she pays the minimum fees, but it's better not to get trapped into the cycle of just paying the minimum. It can make loans very expensive and if another emergency arises before the first loan is paid off, you won't be able to borrow more.
The usual minimum requirements to get bad credit personal loans are:
The amount you can be approved for today depends in part on your income, but most lenders will agree to $500 for a first-time borrower. The fast approval generally comes from those who advertise "no fax" loans. This means you don't need to fax in documents as part of the approval process. With direct lenders, you'll be applying to a single loan company, but other websites may take your application and send it to several lenders who each can decide if they want to approve your loan. If you receive several offers, you can compare the terms and choose only the one that fits your needs best.
Never pay an advance fee to apply for or be approved for a loan. It won't speed things up or make approval more likely, and can be a sign of a scam, or at least a business that makes unnecessary charges. Application should be free. Before you accept the loan, you should be given a full explanation of the costs involved, including the actual dollar amount and the interest rate on an annualize basis (the APR or annual percentage rate).
I was really surprised how fast online loans work. I got several offers to lend $250 and one to lend $500 within an couple of hours. The terms and the costs vary, and since the loans are expensive, it really does pay to shop around and look for the best. --S.A.
It's a shame that banks can't recognize that there really are people who have financial problems, but get past them and turn their credit around. It takes forever for your credit scores to catch up with where you are financially, so unfortunately people stay stuck with bad credit long after they need to. It's good that there are lenders who are more understanding but it's a shame that they have to charge higher interest rates.--S. T., San Francisco