Bad Credit Loans in Florida (FL)
Bad credit loans in Florida. Nearly a third of Americans have poor credit meaning their score is under 600. Including many people in FL.
A poor credit score can have a significant impact on a person's financial freedom. The ability to take out a car loan, qualify for a mortgage, rent an apartment, or even get a job can be negatively impacted.
That said, having poor credit doesn't have to be a death sentence for your financial options. If your credit is below 600, then you need to know these seven facts about bad credit loans in Florida.
1. Florida Borrowers With Bad Credit Can Qualify for Loans
One of the biggest mistakes borrowers with bad credit make is assuming that they cannot qualify for a particular type of loan. Because of this incorrect assumption, they may not even try.
For instance, home shoppers with bad credit can look into Federal Housing Authority (FHA) loans as an option. These loans are insured by the federal government, which makes them more accessible to borrowers with poor credit. Borrowers with credit below 600 may be able to qualify with a higher down payment.
3. Bad Credit Doesn't (Always) Mean a High Interest Rate
Other residents of FL with poor credit fear loan shopping not because they think they will be outright rejected, but because they believe they will be offered cripplingly high interest rates.
To a certain extent, it is true that borrowers with lower credit scores tend to get loans with higher interest rates than borrowers with high scores. But accepting a high-interest loan isn't the only way to qualify.
If you're shopping for a home or an automobile, putting down a higher down payment can help you negotiate for a lower interest rate.
For other types of loans, you can consider options like secured loans. Secured loans use a piece of collateral, like property or a car, to qualify.
4. Consolidate Debt
Florida borrowers with bad credit may be surprised to learn that taking out a loan could actually help them improve their credit score. But it can be true if you take out a debt consolidation loan.
Debt consolidation loans help borrowers to consolidate multiple loan payments, such as credit card loans, personal loans, etc., into one lump payment. Often, if one of the loans is at a higher interest rate, consolidating may help you bring that interest rate down.
Consolidation is also helpful because it reduces the complexity of your debt. Rather than making several monthly payments on different days, you simply make one on-time monthly payment. This can help you pay off your loans more quickly and efficiently.
5. Join a Credit Union
If you have poor credit and want to set yourself up to get good loans in the future, you should consider joining a credit union. Credit unions are like banks, but they are typically smaller, local, and restricted to members. Most credit unions have low barriers to entry, like maintaining a minimum balance of $10 in a checking account.
Credit unions consider other factors apart from credit when offering loans, such as where you live, where you work, and where you went to school. Having a more well-rounded picture of your financial health can help you qualify for better loans.
6. Consider a Cosigner
If you need a loan sooner rather than later, one of the best options for getting a better rate is working with a cosigner. When you apply for a loan with a cosigner who has better credit than you do, the lender will consider their score as well as yours.
Of course, the catch with using a cosigner is that it provides a big benefit for you, but a big risk for them. If you default on your loan, the lender will come after your cosigner to repay it. For this reason, cosigners should typically be people who know and trust you, like parents, siblings, or a spouse.
7. Quick Ways to Improve Credit Can Increase Options
Most borrowers with poor credit are acutely aware that the best way to increase their loan options would be to improve their credit. This advice is not always helpful, especially if you are in need of a loan quickly.
That said, if you have time to plan before applying for loans, taking a few steps to improve your creditworthiness could actually improve your score very quickly. Especially if you are on the borderline between poor and fair credit, bumping up a few points can make a big difference.
The first step would be to reduce the number of accounts with outstanding balances. For instance, if you are carrying a small balance on multiple credit cards, focus on paying off the smallest balances first. This will lower your overall debt ratio, which can improve your score.
If you have fallen behind on payments, focus on building a record of on-time monthly payments. Finally, consider options for diversifying your lines of credit. For instance, if you only have credit cards open, you can take out a small personal loan from the bank that you pay off quickly. This will help improve your score as well.
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Get Access to Bad Credit Loans in Florida
Having some black marks on your credit report doesn't need to stop you from getting the loans you need to advance your life goals. With these tips in hand, you will be on your way to accessing bad credit loans in Florida.
Need help qualifying for a loan? Contact us today with your questions.