Loans for Bad Credit: How to Apply

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If you’re considering one of the many available loans for bad credit borrowers, knowing how to apply once you choose a lender is essential. Here’s an overview of how to prepare for the process, as well as what you’ll need to complete the application.

Check Your Credit

Ensuring your credit report is accurate is a smart move if you’re looking for a loan. Along with letting you know what lenders will see, it also gives you a chance to file disputes if there are errors. You can check your credit report from every major bureau by heading to, a free service that’s backed by the U.S. government.

There are also options available to check your credit score. For example, some banks make credit scores available to members through their websites or mobile apps. Generally, knowing your credit score lets you determine if you’re in “bad credit” territory. If your FICO score is below 670, that’s usually the case. If it’s 670 or higher, you may not need a loan for bad credit, so keep that in mind.

Review the Loan Terms

The loan terms include all of the obligations you’re accepting if you decide to move forward with a lender. Along with principal payments, term length, and interest rate, you need to assess the various fees you’ll need to shoulder.

Origination fees are common, and some lenders also have additional administrative fees. Knowing about any penalty costs, including early repayment penalties, late payment fees, and similar expenses, is also wise, even if you plan to pay in accordance with the terms. That ensures you’re aware of next steps if the unexpected happens.

Make Sure You Can Pay

Generally, loans for bad credit come with higher fees and interest rates than those made available to borrowers with stronger credit histories. Usually, that’s because it takes lenders more time to evaluate borrowers with bad credit. Additionally, lenders take on more risk when funding loans for bad credit borrowers.

As a result, you need to evaluate the loan to ensure you can handle the required payments. After all, late payments or loan defaults will drag your score down further. Make sure you know all of the costs involved, and ask the lender questions before you accept the loan if you’re unclear.

Fill Out and Submit the Application

Once you’ve selected a potential lender, it’s time to complete the application. Usually, you’ll need specific information and supporting documents to apply, though precisely what’s required varies by lender.

At a minimum, you’ll need to provide your contact information and specific personal details, like your date of birth and Social Security number. Driver’s license or government-issued ID numbers are often required as well.

For financial data, you might need to provide past W-2s or 1099s, tax return copies, recent bank statements, recent pay stubs, and address verification documents, such as mortgage statements or a rental lease agreement.

Along the way, you’ll also have to agree to a credit check, with a hard pull usually being necessary. That ensures the lender can review your credit report and score.

Once you provide all of the requested information and supply the necessary documentation, the lender will process your application. The timeframe does vary by lender, though it’s usually disclosed on the lender’s website or during the application process. If you’re approved, you’ll need to sign the loan document and may need to provide bank details to receive the funds and set up payments. After that, simply make the required payments on time to help your credit score improve.