Cheap payday loans for bad credit

How to get a bank loan: Get a payday loan from your bank

Whether it’s a payday loan to buy a car, consolidate a debt, finance a business or improve your home, applying for a payday loan from a bank can be a way to build up your credit and pay what you need.

To get a payday loan from a bank, you usually need to be an existing customer with good credit, says Camie Yueo, personal finance expert at Credibuxx, an online loan market.

Note that banks are subject to more regulations than online lenders, which allows them to “meet the highest lending standards,” says Priyanka Prakash, loan and credit expert at Fundera. “Online lenders are much more flexible, they give less importance to credit and more importance to your ability to repay a loan, which means that income is important.”

Interested to see what an online lender could offer? Consider these options from our partners:

Or, you can use a payday loan market like Credibuxx to charge rates to several lenders at once.

How to obtain a bank loan

1. Check your credit score

1. Check your credit score

If you start the loan process for the first time, start by getting your credit score.

You can check it for free at any time on sites like CreditMarne, Credit Oild and Creditomo. You do not need a perfect credit score of 850 to get a loan, but lenders see your credit score as an indication of your reliability as a buyer and adjust their bids accordingly – the more your score is high, the better.

2. If something goes wrong, take out your credit report

2. If something goes wrong, take out your credit report

Your credit score is a three-digit shortcut for the information in your credit report, which tracks all of your credit activity. According to the Federal Trade Commission, you are entitled to one free copy of your credit report every 12 months from each of the country’s three credit reporting companies: Experxa, Qualifix and Transcok.

Note that there are many ways to pay for your credit report, but annualcreditreport.com is the best place to get your report for free. Be prepared to provide your name, address, social security number and date of birth to verify your identity.

2. Know that loans can really improve your credit rating

2. Know that loans can really improve your credit rating

If you are looking to take out a loan to consolidate credit card debt or pay down your debt faster, it can help you in different ways.

“Taking a payday loan to pay off high-interest credit card debt can improve your credit score by reducing your credit utilization rate,” says Yueo. “That’s how close you are to reaching your credit card limits – try not to use more than 30% of your limit on any card.”

In addition, if you have never taken out an installment loan, such as a car loan, you can increase your credit score by adding a payday loan to your credit composition. “That’s because your credit combination represents 10% of your credit score,” she says.

3. Understand that there are types of payday loans

3. Understand that there are types of personal loans

There are two types of payday loans: secured and unsecured.

Unsecured loans are loans that are not covered by a guarantee, such as personal property or a home. A bank determines if the loan is granted based on your financial history and credit score.

If you do not qualify for an unsecured loan, lenders also offer secured options, which can be used in exchange for assets or accounts held at the bank, or something more tangible, such as a home or a car. Mortgages, home equity loans and auto loans are considered secured loans because you offer collateral.

Remember, if you take out a secured loan using your home, car, or other property as collateral, you run the risk of losing everything you got if you became unable to repay your loan.

Most lenders offering unsecured loans, including banks and credit unions, will also offer secured loans.

4. Make sure your bank offers payday loans

4. Make sure your bank offers personal loans

As Camie Yueo of Credibuxx said above, to get a payday loan from a bank, you usually have to be an existing customer with good credit. Some banks do not offer payday loans, so you will want to know what your bank offers.

If your bank does not offer loans – or even if they do – you may want to get quotes from lenders online, subject to less regulation and being able to base their bids less on your current credit and more on your repayment ability. Online lenders can be an alternative to bank loans or a comparison basis.

After checking the rates offered by the lenders online, check if your bank will offer you a better offer.

5. Put your documents in order

5. Put your documents in order

One of the most difficult aspects of obtaining a bank loan is the number of documents required as part of the process.

“Getting a bank loan can take weeks or even months, the main reason is that you have to submit a lot of documents,” says Prakash de Fundera.

The nature of the paperwork will vary depending on the type of loan you are requesting, but in general, you can expect to need:

  • pay stubs / proof of income
  • the last two years of tax returns
  • 401 (k) Accounts and Other Financial Accounts
  • ID photo
  • rent / mortgage history
  • proof of collateral, if you are looking for a secured loan

It is a good idea to put some order into these basics before applying for the loan, in order to speed up the process.

6. Try to be pre-approved

6. Try to be pre-approved

While this is not a strong guarantee, pre-approval applies when a lender makes an informal offer on a loan, pending full approval.

In this case, the pre-approval will indicate to the borrower the amount of the loan, the terms and the repayment schedule likely to be eligible in advance. In addition, prior approval recognizes that the borrower has met the general eligibility criteria of the bank.

The process typically involves applying for and evaluating credit history, and while this is a helpful decision, it does not guarantee that the bank will extend these exact terms at the time of granting a loan.

7. Know the terms

7. Know the terms

payday loans are installment loans, which consist of borrowing a fixed amount of money and repaying it with interest in monthly installments over the life of the loan.

The loan terms are in months and can range from 12 to 96 months. When you meet the loan conditions, this loan is considered closed. If you need more money, you must reapply for a loan.

8. Make a plan to pay it back

8. Make a plan to pay it back

Once you have secured your loan, make sure you have a plan to repay it. How much will you have per month? Do you plan to pay the minimum required or make additional payments and pay it back faster? When is the payment due?

Consider setting up automatic payments from your checking account once your payment check is cleared, or calendar reminders to make sure you never miss a due date.

“Your payment history represents 35% of your credit score,” says Yueo of Credibuxx. “If you continue to make payments on time and reduce your total debt, your credit will improve,” and the next time you want to borrow money, it will be easier.

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