Top Myths About Bad Credit and Personal Loans

1. You need a high credit score to qualify for a personal loan.

Some applicants think that their credit histories will severely impact their ability to obtain a personal loan. You may have late payments, a foreclosure or other negative marks that could be considered red flags among lenders. However, not all lenders will reject applicants due to poor credit scores alone.

2. You need collateral if you have bad credit.

Secured loans require collateral, which can be in the form of personal assets like a home or a car. Often, lenders will ask for collateral for certain loans because they are concerned the borrower will not be able to repay the full amount. Unsecured loans will generally have a faster application process and don’t require collateral.

3. Repayment terms could be difficult.

When researching options for personal loans, pay attention to the repayment terms and conditions. People with bad credit could be worried they will be unable to adhere to the repayment terms of their loans. It is a common misconception that you will have to pay back your loan all at once. Rather than pay in one lump sum, you could choose a lender that will let you pay back your loan in monthly payments. Consider applying for signature installment loans. These are not only unsecured loans requiring no collateral, but also feature repayment terms that are convenient because loan recipients know exactly how much to pay each month, according to Credit.com.

How you can apply for a personal loan even with bad credit.

Don't let bad credit stop you from achieving your financial goals. Apply for an unsecured personal loan with LoanMe, which features a short application process and easy access to fast cash. LoanMe considers applications from borrowers who have less than perfect credit. You need only three documents to apply: a bank statement, proof of income and a valid form of ID.

Not only can a personal loan help you get on track financially by providing money when you need it, but this type of financing can also help rebuild your credit by improving your on-time payment history. With a personal loan, you can pay down credit card debt or other bills that are coming up.
SOURCE;LOANME