It may seem counterintuitive that you would take out personal loans to repair your credit. However, this can improve your credit score if it is handled well. A credit score is calculated based on five factors, each carrying a different weight. This information will allow you to decide how much you can afford and which types of loans are best for you.
Car loans
To rebuild your credit score, it is important to pay your car loan on time. A late payment will only set back your credit rebuilding efforts. There are still decent car loans available to help rebuild credit. It is not easy to find a decent car loan interest rate with bad credit. However, you can find one if your credit score is good and your payment history is positive.
Low credit score applicants are likely to pay higher interest rates. Therefore, it is important to shop around for the best deal. Alternativly, you could postpone purchasing a vehicle until you improve your credit score so that you qualify for a better rate.
Installment loans
If you are punctual with your payments and follow good financial habits, then installment loans could be a great option to repair your credit. The credit bureaus report every payment you make to these loans, which can help boost your credit score. Late payments can cause serious credit scores to be lowered. If you don't make your monthly credit payments on time, then you need to find a new source of credit.
Before granting an installment loans, many lenders require a minimum credit score. These are because those with higher credit scores have a better chance to repay the loan. However, some lenders will take your annual income into account when determining your interest rate.
Payday loans
Payday loans are great if you need a little extra money to cover a short term crisis. However, they can have a high interest rate and require payment within two weeks. These are not for the weak of heart. These items can actually end up costing you much more than you thought and can even cause credit damage.
While a payday loan is fast and easy to get, it can be difficult to repay. These loans do not require large monthly payments. Instead, opt for an installment loan that has fixed payments over a specific time period. These loans are for people with bad credit to make their monthly payment more affordable and predictable.
Co-signers on installment loans
An installment loan can be arranged with co-signers for those who are trying to rebuild their credit. However, it is important to remember that defaulting on an installment loan will lower your credit score. Lenders will be less likely to offer you the best terms because they view your credit history and risk. They might also repossess collateral.
It is possible to get an installment loan without a cosigner. Most people will request a friend or relative to sign on a loan. This commitment can prove to be very expensive and can even cause irreparable harm to a couple. It's therefore a good idea learn about other loan options.
Fairstone personal loans
Fairstone offers personal loans for those with bad credit who need to rebuild their credit. There are more than 240 branches in Canada and they offer both secured and unsecured personal loans. A personal loan application is very simple. You can use your financial information, credit score, and other financial information to see if you are eligible for a loan.
You can apply online, at Fairstone or at any branch. Although it is time-consuming, the process can be completed quickly. You can also send documents and details via email. Although the application process takes a while, it is significantly faster than that of other lenders. There are not many Fairstone personal loan reviews online, so it's hard to judge the company's customer service.