A lot of rumors out are out there about getting a loan when you have bad credit. These myths can deter a person who can actually get a loan from even applying for one in the first place. The following three “truths” about bad credit loans shouldn’t be believed.
Myth #1: I can’t get a loan if I have bad credit.
This just isn’t true! There are plenty of borrowers out there who have been approved for a loan despite a less-than-fantastic credit rating. According to Peoples Credit Inc., “People who have a low credit score are often too afraid to apply for a loan because they believe they’ll never pass the credit check.” However, there are some loans out there that are specifically for people with bad credit. When you’re stuck financially, consider applying for a car title loan or payday loan, or visit a pawnshop.
Myth #2: Car Title Loans and Payday Loans Are the Same Thing
Despite what a lot of people believe, there is actually a difference between car title loans and payday loans. While both types of loans are for people with bad credit, there are distinct differences between them. Car title loans, sometimes referred to as auto title loans, use the borrower’s car for collateral. The loan is secured by the car’s title, which means that the lender can offer the borrower more than they could with just a payday loan. Since the title of the car and not the car itself is the collateral, the borrower can still drive their car while paying back the loan.
Payday loans, on the other hand, are unsecured loans for people with poor credit. This type of loan is risky for the lender and they’re often hesitant to loan too much money at one time. For people who don’t have a car, though, this isn’t a bad option.
Myth #3: All Bed Credit Loans are Scams
There are tons of articles floating around the Internet that say that bad credit loans are all a scam, designed by people who want to rip-off borrowers. The claim is that the lenders take advantage of people who are in a desperate financial situation. However, the truth is that many lenders are true to their word and honestly want to help people out who need it most. When it comes to car title loans, for example, customer service agents and lenders create repayment plans that are viable for the borrower. These companies cater to the needs of the borrower.
When it comes to loans for bad credit, don’t believe everything you hear. There are plenty of myths out there, but it’s not very hard to uncover the truth behind them. If you have bad credit, a personal loan can actually help you get on top of your financial situation.
Sources:
https://www.1800loanstore.com/articles/bad-credit-loans/
