Bad Credit Loans in
Learn more about bad credit loans in California. Get tips and suggestions on finding the right loan or financing option for your situation.
Are you one of the millions of people in California with bad credit? Are you looking for a loan, but are not sure where to turn? You may be surprised to learn that there are a variety of bad credit loans in California available.
In this article, we will explore your options and help you find the best loan for your needs.
What Are Bad Credit Loans?
Bad credit loans are a category of personal loans for those with either low credit scores (poor credit) or no credit.
While credit score requirements for a personal loan vary from lender to lender, most typically follow the FICO credit score model and prefer minimum scores of 610-640 and up.
Most lenders offer personal loan options only to those with good or excellent credit, which requires a credit score of 690 or above. There are fewer options for those with bad credit (630 and below) but bad credit loans are out there.
Borrowers typically seek out bad credit loans to help deal with financial emergencies like medical bills or job loss, but also for debt consolidation. This flexibility is what makes a personal loan so attractive to borrowers.
What Kind of Bad Credit Loans Can I Get in California and How Do They Work?
Below you will find additional information about the different types of bad credit loans you can get in California.
Personal Installment Loans
Some physical and online lenders provide bad credit installment loans in California. They may check your credit, but will still consider people with low credit. Lenders who do perform credit checks typically are able to offer more favorable interest rates than those who do not check your credit report. Utilizing a co-signer with good credit may help secure more favorable terms and interest rates than relying on your credit history alone.
A personal installment loan is commonly referred to as a personal loan. These are offered as a secured loan or as unsecured personal loans, which means collateral may be required depending on which type you qualify for.
Additionally, there are now several lenders willing to provide online installment loans in California. Simply input your desired loan amount and some information about yourself to see if you qualify. These loans come with flexible amounts and payment plans and can be acquired without ever needing to leave your home.
California payday lenders can't give consumers a loan over $300, including finance charges. They usually collect by depositing the borrower's post-dated check, so California law restricts its value. In California, finance charges on payday loans are limited to 15% of the loan amount.
A payday loan can last up to 31 days. The loan cannot be rolled over or extended.
Car Title Loans
You can borrow money with your car as collateral. However, they charge up to 30% of what you borrow under $2,500. There is no limit on the interest rate lenders can charge on amounts above that amount. The drawback of using a car title loan is that if you can't pay back the loan, you lose your vehicle.
California Bad Credit Loans Requirements
- You must be 18 years or older.
- You need to prove that you are a legal resident of California.
- You need to have a stable source of income of at least $1,000 a month. A regular source of income shows that you'll be able to pay back the loan plus interest.
- You must have a valid checking or savings account with direct deposit.
- For your application to be approved quickly, you must provide contact information. A phone number and/or email helps lenders reach you easily. You must also provide a Social Security number if applying online and a government-issued ID if applying in person.
- You cannot be a regular or reserve member of the armed forces serving on active duty under a call to order of more than 30 days (or a dependent of someone who is).
Benefits of California Bad Credit Loans
Below you will find some of the benefits of obtaining a bad credit loan in California.
Consolidate Your Debt
You can use a bad credit loan to pay off several other smaller loan amounts, or credit cards to condense multiple payments into one. This may reduce the average interest rates, lower your monthly payment, and even help improve your credit report by having fewer outstanding balances.
Improve Cash Flow
If you're struggling to make ends meet each month, utilizing a loan can help provide a boost in cash flow to help ease your tight financial situation. A bad credit loan can help Californians get access to the additional capital they need to help cover and get current on their bills.
A Better Life
Having enough money to pay your bills each month, obtain the items you need, and have less overall financial stress will enable you to live a better life.
How Much Money Can I Get with California Bad Credit Loans?
The amount you can borrow will depend on your credit score, the lender, the type of loan, and your income.
For example, those with a minimum credit score of 585 could borrow up to $36,500 for a 24 to 60-month term. Some physical and online lenders are willing to loan to those with a minimum credit score between 600 and 620 up to $50,000 with a 36 to 60-month term.
No matter the loan amount, one factor that buyers must be aware of is the annual percentage rate (APR). APR represents the yearly interest costs of the loan, with higher percentages resulting in more interest being paid.
The average interest rate for a personal loan is 9.41%, but the APR for the examples above ranges from 4.37% to 35.99%. The lower your credit score, the higher your APR will typically be.
Buyers should also keep the loan origination fee in mind as it can range from 0% to 8% of the loan amount.
How to Get Bad Credit Loans in California
You can apply for installment loans online 24/7 from many legitimate lending companies licensed to operate in California.
- Start with a quick and simple California installment loan application form.
- Your loan request will be sent directly to the lender for verification and approval.
- Once approved, you'll be able to have the money directly deposited into your credit union or bank account.
Our California installment loans application form is free, there's no obligation. Even with a bad FICO score, it shouldn't be a problem getting an installment loan in California.
Loan Alternatives for Californians with Bad Credit
If you're having trouble getting approved for a bad credit loan, there are still other options available for you to consider.
Family and Friends
If you have friends or family you're able to borrow money from, this could be a great option to consider as they likely won't care what your credit scores are. You should consider setting up a written agreement to discuss the repayment terms.
If your employer allows it, see if they can give you an advance on your next paycheck. If they do, find out if there are any fees involved.
Share Or Certificate-Backed Loans
You may be able to ask your bank if they'll give you a share or certificate-backed loan. With this type of loan, you use a deposit you already have at the bank as collateral, and the money is frozen or incrementally thawed as you repay the loan.
Frequently Asked Questions
Below you will find the most frequently asked questions about getting a bad credit loan in California.
Are Bad Credit Loans Legal in California?
Yes, bad credit loans are legal in California. This includes payday loans and car title loans, although many other states have restrictions on these loan types.
How Hard Is It to Get a Bad Credit Loan in California?
If you have a bad credit score (630 and below), it will be harder to get a loan, but it is possible. Your best chance is with companies that specialize in lending to people with bad credit.
How Fast Will I Receive Funds?
In most cases, verification for installment loans only takes a few minutes and the funds will be deposited into your bank account the next business day.
Can I Get a No-Credit-Check Loan in California?
Yes, it is possible to get approved for a loan in California with no credit check, but there's a catch.
Many, if not all, physical and online lenders will require you to undergo a credit check in order to get approved for your loans. However, some credit check lenders are willing to forego the process in exchange for charging higher interest rates or more fees that offset the high-risk nature of the loan.
Will Bad Credit Loans in California Help Me Build My Credit?
It is not advisable to take out a bad credit loan just because you want to build your credit score or credit history. There are many other avenues for improving your credit history that doesn't require paying the high interest rates of a bad credit loan.
Furthermore, depending on the type of loan you obtain, your loan may not be reported to the credit bureaus. Payday loans and car title loans are examples of loans that may not be reported. However, personal loans may help improve your score if you make payments in full and on time.
Conclusion—Which Loan Should You Apply For?
Do you have bad credit but still need access to quick cash? If you live in the state of California then a bad credit loan might be right for you.
When shopping for a lender, make sure to look at the:
- fees and penalties
- interest rates
- repayment options
- credit score requirements
Comparing these factors will help you find the best personal loans for your needs as a borrower with poor credit.
It's also important to consider how much money you need to borrow, how you'll be spending the money, and how you'll repay your loan.
Remember that you must do your due diligence before signing on the dotted line to ensure you're comfortable with the terms of the loan and will be able to fulfill its requirements.