There are many different type of bad credit loans, each bearing specific advantages and disadvantages. But of all the types of this financial services available today, personal loans are the most popular.
Just like what the term implies, personal loans are short-term loans that are granted regardless of how the borrower wants to use them. They may be used for a host of reasons, including for car fix, groceries, holidays or car purchase. Other reasons for choosing personal loans over the other types are as follows:
1. Easy to Satisfy Eligibility Criteria
With personal loans, you do not need to present collateral just to get your application approved. The eligibility criteria are easy to gather and satisfy.
Among the eligibility criteria of most bad credit loans include proof of age and US citizenship, proof of income and an active bank account. For the proof of income, there are some lenders that would accept other proofs other than a pay slip. The idea here is that as long as you can prove that you are getting money every month, then you would have the means to pay for such loan.
The active bank account, on the other hand, is needed because that’s where the funds will be wired to if your application is approved. It will also be the bank account that will be used to deduct your payments from on the due date.
2. No Agent or Middleman
Especially when you’re using the services of an online lender, you will understand the relief offered by having no agent or middleman. This means that you don’t need to share your personal or financial information with a third party and thus, the entire transaction can be made safer and more secure.
3. Better Rates than Cash Advances from Credit Cards
Personal loans promise better interest rates than making cash advances from credit cards. However, personal loans would still need to follow the short terms of most bad credit loans, which is a maximum of 30 days.
Always strive to pay back within the prescribed period of time to avoid roll-overs and other potential fees and rate increases.
Of all the bad credit loans, personal loans with bad credit are the most preferred. The three reasons above offer good explanations why.