If you’ve applied for and been declined for bank loans or credit cards in the past, you may think of yourself as having “bad credit”. If you’re looking for a “bad credit loan”, be careful, because not all loans for those with less than perfect credit are the same. Transform Credit can offer loans to people with a blemished credit record at rates far better than payday lenders or high cost installment loans because our loans require someone who trusts you to be a cosigner.
You’ve probably heard of credit scoring or credit scores. A credit score is a tool lenders use to measure risk and predict how likely you are to pay back a loan. Your score is based on your past behavior - for example, if you’ve paid bills late in the past, or recently applied for a lot of loans or cards, you’ll likely have a lower score. While there isn’t a hard cut off of what a “bad” credit score is, if you have a score lower than 620, you may have a hard time getting approved for a traditional bank loan, and thus be looking for a “bad credit loan”.
While you may not be able to be approved for a traditional bank loan or credit card, there are a number of options available to people with lower credit scores. For instance, payday lenders don’t typically use traditional credit scores, and may be an option for a bad credit loan. There are also some lenders that offer installment loans to those with bad credit. However, these tend to be expensive, with APRs from 50% to as high as 400%, depending on the lender and state. They often have to be repaid quickly -- with payday loans requiring repayment typically within a month, and most bad credit installment loans having repayment terms less than a year.
Transform Credit is an any credit loan. Instead of looking at your credit score, we look at whether or not someone trusts you enough to cosign your loan. As long as you have a qualified cosigner, we’ll approve almost anyone. There are a few exceptions, for example if you’re in an active bankruptcy proceeding, but there is no minimum credit score required -- really.
With an approved cosigner, you can borrow up to $10,000 at 35.99% APR and repay it over up to 5 years -- much better than many bad credit loan alternatives.
While pretty much anyone can be a cosigner, some cosigners are much more likely to be approved than others. To maximize the chance your cosigner is approved, we suggest talking to them ahead of time, and choosing someone who: is a homeowner; has a stable source of income; has a strong credit history; is financially separate from you (doesn’t share a bank account or financial obligations).