Loans for Poor Credit in Ohio (OH) | What Ohioans Should Know
What to know about poor credit loans in Ohio. You go to check your credit score again. You're not entirely surprised, it's still a lot lower than you would like it to be. You're not alone -- roughly one-third of Americans have what's considered a poor credit score.
The problem is, you have an unexpected expense looming that you don't know how to pay for. You need a loan, but who will give you one?
Luckily, there are some options for loans for bad credit in Ohio. You'll probably have to pay an interest rate that is not the most ideal, but you can find help.
But don't let loan companies in Ohio take advantage of you. Learn these 6 things borrowers should know about loans for bad credit.
1. Percentage Rates Are Capped
In the state of Ohio, the law caps the interest rates that lenders can charge at an annual percentage rate of 25%. If a lender offers you a loan with a higher rate of interest, look elsewhere for a loan.
Not only do you not want to pay such a high interest rate, but also this is a big red flag for shady lending practices. Lenders should always know and abide by the laws in the state where they are operating. If they're not following this basic requirement, what else might they be trying to pull?
2. Lenders Can Charge a Slew of Fees
It is always extremely important to carefully read the fine print before agreeing to a loan. There are a number of fees that Ohio law allows lenders to charge. They are allowed to receive these fees above the 25% annual percentage rate they can charge.
- Membership fees
- Credit limit overage fees
- Cash advance fees
- Late payment fees
- Bounced check fees
- Application fees
- Origination fees
- Processing fees
- Prepayment fees
A given lender will not necessarily charge all of these fees, but you should be aware of what you will be responsible for. These fees can add up and you should plan for them, or avoid them if at all possible.
3. Know Your Credit Score
One mistake that some people make is not doing their own research on their credit score. It's possible that there is incorrect information reflected on your report.
This can lower your score and cost you extra money in interest on a loan. It may even prevent you from qualifying for a better loan product that would save you money.
Take the time to check your score with one of the three major credit reporting agencies and ensure that everything is correct. You can also use this information to work on repairing your credit and building your score back up again.
4. Offers Can Vary Significantly
You may think that most lenders will charge roughly the same amount. However, lenders have a lot of freedom in how much they can charge for their OH loan products as long as they don't exceed the limitations set by the law, especially or a poor credit loan in Ohio.
Be sure to take the time to shop around and compare loan offers. The Internet makes this easy to do, so take advantage. A difference of even 1% can translate into big savings for you.
Remember not to compare the interest rates only. Some lenders may advertise attractive interest rates, but charge you more in fees. Understand the total cost of each loan option before making your decision.
5. Find a Co-Signer
One good way to qualify for a lower interest rate when you have poor credit is to find a co-signer. If someone with good credit is willing to vouch for you, lenders will often offer a better rate.
Don't take advantage of their good will, however. Use it as an opportunity to improve your credit by paying back your loan responsibly.
6. Understand Loan Types
Not all loans are created equal and lenders aren't necessarily on your side. They may have better options that will save you money, but they won't always volunteer that information. Do your research and understand the types of Ohio personal loans for yourself.
For example, secured vs. unsecured loans. You can generally save money with a secured loan. For this type of loan, you offer up some sort of collateral. It could be your house, a property you own, or even your car.
This offers the lender more security that you will pay back the loan. Plus, if you don't pay, they have the right to take possession of whatever you put up for collateral. They will generally be willing to offer a better rate for that.
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If you don't have anything to offer as collateral, you'll have to go the unsecured loan route. This is exactly what it sounds like. The lender only has your word that you'll pay the loan back. If your credit score doesn't reflect past responsibility, they will charge a higher interest rate to offset their risk.
You should also know which types of loans to avoid as much as possible. Loans with high origination fees-or high any kind of fees are not generally good options.
You should also avoid extremely short-term loans. Many of these types of loans are structured to take advantage of people who need cash fast but are not healthy options for them.
Loans for Bad Credit in Ohio: The Bottom Line
The main thing you need to keep in mind when applying for a loan is to do your research. The more you know, the savvier you can be about the loan you choose.
There are many options for loans for bad credit in Ohio but not all of them may be a good fit for you. Don't let a smooth-talking lender talk you into a bad decision.
For more information about loan options and repairing your credit feel free to check out our blog!