What Is A Credit Builder Loan?
If you have bad credit or no credit and you want to improve your credit score, one great option is to apply for a credit builder loan. If you have a poor credit rating or are just getting started building credit, your options for improving your credit score are going to be severely limited. That's why a credit builder loan can be so beneficial.
Determine Your Credit Worthiness
As you prepare for a payday loan, the best first step is finding out your credit score. This three-digit number is a numeric manifestation of your credit health, and it plays a huge role in the type – and quality – of loan you can qualify for.
Getting a free copy of your credit score will help you determine your next best steps. From there, you can start shopping for loans among varying banks and financial institutions.
If you have excellent credit (a FICO score of at least 720), your best option is almost always a 0% APR credit card. With these cards, you will pay 0% on purchases for anywhere from 12 – 21 months.
The biggest benefit is that you can avoid paying interest on your purchases during the card's 0% introductory offer period. Not only that, but you don't have to visit a bank or gather excessive paperwork, either. Most of the time, you can apply for a payday loan online.
If you have good credit (A FICO score between 690 and 719) and can't qualify for payday loan, you should be able to qualify for a payday loan from an online bank or traditional lender. The better your credit score and the higher your income, the more money you can borrow and the better loan rates you'll receive.
If you have average credit (FICO scores between 630 and 689), you will likely need to apply for a payday loan with an online bank or traditional lender. Depending on your income and payment history, you could still qualify for a quality loan with low rates and fair terms.
With bad credit (a FICO score between 300 and 629), it's unlikely you'll qualify for an unsecured loan without a co-signer. You may need to take out a secured loan with collateral, such as your car or any land you own. You can also consider finding a family member to guarantee the loan.
Where to Find a Payday Loan
As we mentioned already, the best places to find a payday loan are typically traditional banks, credit unions, online lenders, and 0% APR credit cards. With any of these options, you'll get a fair loan with a monthly payment you can afford.
If you have a long-standing relationship with a bank or credit union, they are often your best bet outside of 0% APR cards. Depending on your standing and the length of your relationship, you may even qualify for special loan offers with exceptional terms.
It's also important to remember that applying for an online loan is easier than one might think. If you don't like your bank's offer or you don't have a bank near your home, you can gauge your loan options by filling out a simple loan application online.