Getting a loan with a bad credit score can be difficult, but it isn’t impossible. So what's the easiest loan to get with bad credit? Here are some ways you can improve your chances of approval—and even one guaranteed way of raising emergency cash no matter what your credit history may be, title loans.
How Is A Credit Score Computed?
Banks, credit cards, and other lending institutions use your credit score or credit rating to determine how “credit-worthy” you are.
While there are many ways to calculate the credit score, the most commonly used is the FICO score. Introduced by the Fair Isaac Corporation, banks now use this to determine a person’s “perceived ability to pay” according to their borrower history. This included:
- Years of credit history
- Total amount borrowed
- The regularity of payments (no defaults, delays, or legal action for non-payment)
- Credit mix (types of loans: mortgages, credit cards, installment loans, etc.)
Banks Are Becoming Stricter About Credit Scores
It is actually quite difficult to get a high credit score, and even those with “average” credit scores may have a hard time getting a loan today. Because of the economic crisis and uncertainty caused by the COVID-19 pandemic, banks and other institutions are tightening restrictions on loans.
Tips For Applying For Loans With A Bad Credit Score
Know Your Credit Score
You can get one free credit report every year. Use this opportunity to monitor your history, and gauge your eligibility for loans. You can also download apps or use free websites that will do a rough calculation of your credit rating. Knowing your score can also help you find any errors on your credit report, either because of miscalculation or identity theft.
Approach Different Lenders
Most of the large banks automatically reject loan applications for credit scores below 700. However, you may have a higher chance of approval if you go to a small community bank, credit unions, or online lenders.
Find Someone Who Can Co-Sign The Loan
Some banks will be willing to approve a loan if it is guaranteed by your employer, or a relative or friend.
Your guarantor has to prove his ability to pay the loan, either through income statements or a list of assets. He also has to sign a form that binds him to take care of the loan if you cannot make the payments.
Build A Relationship With A Bank
Banks may be willing to give more leeway if you are a long-time customer. If you and your family have several accounts with the bank, or you can be personally referred by someone who is a VIP account holder, you can be approved for a loan even if you have bad credit.
Offer Collateral
Banks may allow you to use your house, vehicle, or another asset as collateral for a loan. However, this process usually takes a long time because they will often spend weeks evaluating the property and determining its value. You will also have to show several documents.
Because of the bank red tape, this is not a viable option if you need to raise money right away.
What's The Easiest Loan To Get With Bad Credit?
If you need to raise money right away, and you don’t have the time to go through lengthy bank applications, consider getting an online title loan. It is a very easy loan to get regardless of your bad credit.
What Are Title Loans?
Title loans allow you to borrow money using your vehicle as collateral. Delaware title loan allows you to borrow from $300 to $15,000, depending on the appraised value of your vehicle.
They have several advantages over bank loans:
- You do not need a high credit score. Even if you have a bad credit history or have no credit history, you can still apply for title loans.
- The application process is simple, fast, and convenient. You don’t have to present a lot of documents like proof of employment, income tax returns, or assets. You can even begin some of the applications online!
- You can get the money right away. The appraisal and application take about 30 minutes. If you’re approved, you get the money within the same day.
- You can still use your car. As long as you keep to the payment schedule, you will be able to enjoy full use of your vehicle.
What Are The Requirements For Title Loans?
You just need to show your driver’s license or any state-issued I.D. card, your vehicle registration, and your vehicle for inspection.
Any vehicle can be used for a title loan, like a car, truck, motorcycle, van, SUV, or RV. However, it must be under your name and lien-free. That means that it is fully paid for and does not have any loans or outstanding judgments against it.
How Do I Find Title Loans?
Delaware Title Loans is one of the most trusted providers of title loans. We are known for our convenient application process, friendly customer service, and fast processing. You can apply for title loans through one of our title loan locations in Delaware or starting online and then coming into the store. Just follow this guide:
- Fill out the online form on our website;
- One of our loan representatives from the nearest Delaware location will call you. He or she will walk you through the process, explain the requirements, and answer any questions you may have. When you are ready, you can head over to the store;
- Bring your driver’s license or state-issued ID, your lien-free title to your vehicle, and your vehicle to the store. A title loan representative will check your items and do a quick vehicle inspection;
- If your loan is approved, you will get the cash on the same day.
When bad credit is getting in your way, it is time to do some research. You have to learn all the ways you can get a loan despite your bad credit score. And now you know that the easiest loan to get with bad credit is a title loan.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
