Hardship loans for bad credit can help you pay for an emergency expense, even if your credit isn’t great. (Shutterstock) No matter how well you think you’ve prepared, life has a way of throwing curveballs sometimes. If you’re facing an emergency or other unexpected expense, you may need to take out a loan — and fast. But what if you have bad credit? Even with a lower credit score, it’s still possible to take out a loan to cover emergency expenses — it just might require a little extra work. Here’s a look at how hardship loans for bad credit work and how to find a lender that offers hardship loans. If you’re looking for a hardship loan, Credible lets you compare personal loan rates from various lenders in minutes. Hardship loans — also called emergency loans — are exactly what they sound like: personal loans intended to help borrowers get through an unexpected or sudden financial hardship. This could be a medical emergency, covering rent or mortgage payments following a job loss, paying for funeral expenses, or funding an unexpected home or car repair. A hardship loan for bad credit is an installment loan that’s available to borrowers with a low credit score. These loans aren’t technically any different from other personal loan products. But taking out a hardship loan usually means finding a lender that offers a quick application and funding process. The Fair Isaac Corporation (FICO) Score is the most commonly used credit-scoring model. While FICO has different versions of its scoring model, the FICO Score 8 is the most common. A FICO Score below 580 is considered poor, while a score of 580 to 669 is considered fair, or below average. Depending on the lender and the credit-scoring model it uses, a credit score that falls into the fair or poor range will make it more difficult to take out an installment loan because it could indicate that you pose additional risk to a lender, and may not be able to repay your loan as agreed. A score of 600 or below may make getting approved for a loan even more challenging. NO-CREDIT-CHECK LOANS: WHY TO AVOID THEM AND WHAT TO DO INSTEAD Hardship loans for bad credit are available through a number of different financial institutions. Several online lenders offer loans to borrowers with lower credit scores. You may also have luck applying through a bank or credit union where you already have an established relationship. You can compare personal loan rates online with Credible, and it won’t affect your credit score. It may be difficult to qualify for a personal loan with bad credit, and there may even be specific risks to consider. But some lenders work specifically with low credit borrowers, which may make it easier to get approved for the hardship loan you need. These five Credible partner lenders offer hardship loans, each with a credit score requirement below 600: Avant LendingPoint OneMain Financial Universal Credit Upgrade If you need a hardship loan to cover an emergency expense, the application process is relatively straightforward. Where you choose to apply for that loan, though, can make all the difference — especially if you’re trying to get a hardship loan with a bad credit score. Follow these steps to apply for a hardship loan: If you’re ready to apply for a hardship loan, visit Credible to easily compare personal loan rates. Needing a hardship loan is difficult enough. Finding a lender that’ll approve you with a bad credit score can be even tougher. But applying for a hardship loan that you know will affect your credit score further? Ouch. Put simply: Yes, getting a hardship loan will affect your credit score. Applying for and taking out a hardship loan can lower your credit score initially because multiple factors go into calculating your score, including: You’ll get at least one new hard inquiry during the application process, which can cause your score to drop by a few points. Adding a new loan account will also increase your total amount owed and reduce the length of your average credit history. But as you pay off that hardship loan, each of these factors can improve. Over time, it won’t be a "new" account anymore, and will increase your average age of accounts. If you make your payments on time, your positive payment history can help build your score, and your score can gradually improve as you reduce the balance you owe. WHAT TO KNOW IF YOU DEFER YOUR PERSONAL LOAN Like any financial product, hardship loans have important pros and cons to consider — especially if you’re a borrower with bad credit: If you have bad credit, you may decide that a hardship loan isn’t the right option for you. Here are some alternatives you may want to consider: Source: Read Full ArticleWhat are hardship loans for bad credit?
What’s considered a bad credit score?
Where can you get a hardship loan for bad credit?
5 lenders that offer hardship loans for bad credit
How to apply for a hardship loan for bad credit
Will getting a hardship loan affect your credit score?
Pros and cons of hardship loans for bad credit
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Cons
Hardship loan alternatives