Bad Credit? How to Find a Legitimate Lender for a Personal Loan

So you’ve been turned down for a personal loan from your bank or credit union because your credit scores were too low. What do you do now? There are many institutions that offer personal payday loans to those with bad credit, most even offering online application processes with guarantees to deposit funds into your bank account within 24 hours of approval. Find out if this is the best option for you.

Finding a Legitimate Lender

For those with bad credit, finding a lender who will lend you money can be a nightmare. Bankruptcy, repossessions, garnishments, and foreclosures will impact your credit negatively; however, even so there are lenders who are willing to underwrite a personal loan based on these circumstances. The Internet is stuffed with advertisements and websites which specifically target those people who need a personal loan but who have bad credit, and it is easy to get bogged down in trying to figure out what companies are legitimate and which ones aren’t. The following are a few tips one should consider before committing oneself to any personal unsecured loan:

  • Even if you think your credit rating will earn you a denial from your bank or credit union, check with them first. Many banks offer personal loans for people with bad credit, such as CitiGroup and Bank of America. Be sure to shop around because banks will have various qualifying processes and charge different rates.
  • Many online companies offer 24-hour approval processes and overnight bank deposits, however many of these companies are either predatory lenders, charging exorbitant rates, or are simply scams. Check with the Better Business Bureau, as consumers often leave personal comments regarding their experience with a company on this site that may be pivotal in helping you determine whether or not you want to do business with said company. Also, there are other websites which allow consumers to write reviews about specific companies. Find out all you can about a company before becoming locked into an agreement with one.
  • Make certain that you are clear on the terms of repayment. Avoid companies who do not allow you to see a Truth-In-Lending statement or any document specifying the terms of the loan before you commit to it.
  • If applying for a loan online, you will be sending personal information over the Internet, such as social security numbers and bank account information. Before submitting such information, be certain that the company has a secure website, in which the information sent over is encrypted. This will avoid the wrong eyes seeing your personal information, which could result in identity theft and other cases of fraud perpetrated against you.
  • Despite advertisements of companies offering thousands of dollars for people who need money fast, the reality is that these same companies in many instances do not offer first-time consumers maximum amounts of cash. Often, the highest amount a first-time borrower may qualify for is no more than $300.00, so it is important to know how much you need before applying for a loan. Resist the temptation to borrow more than you need, as the more you borrow, the more you will have to pay in fees and finance charges.
  • If you are doing business with a company online, make certain they have a legitimate business address and telephone number. Call ther business offices and speak to a live representative before faxing sensitive documents or sending personal information over the Internet.

And finally, sleep on it. Do not make a hasty decision regardless of your circumstances.