Poor Credit Loans in Oklahoma (OK) - Your Guide
Oklahoma poor credit loans, the 8 things you should know before signing any documents. Lots of people end up with poor credit for one reason or another, often due to no fault of their own. In fact, over one-third of Americans have credit scores below 601, the dividing line between bad and fair credit. It takes years to repair your credit, but what happens if you need to take out a loan before then?
Finding yourself in a financial emergency and in need of a personal loan when you have poor credit is an incredibly difficult situation. You may find yourself asking, "What Oklahoma loans are available to me?" Don't worry, you have some options.
Read on to learn everything you need to know about applying for loans in Oklahoma if you have poor credit.
Are Unsecured Loans Available?
Yes, unsecured loans are an option for many borrowers with poor credit. An unsecured loan is a loan where the lender does not require any type of collateral from the borrower. The perk of personal loans is that lenders allow borrowers to pay back the loan over a period of months to years.
Many allow first-time borrowers to take out a small loan, to begin with, and once that loan is successfully repaid they are eligible to take out larger loans.
Unsecured loans for borrowers typically come with very high interest rates, depending on the severity of the risk of lending to you. Their interest rates range from about 10% all the way up to 300%. The worse your credit, the higher your interest rate will be.
What About Secured Loans?
Yes, these are available in Oklahoma. Secured loans are loans that require the borrower to provide collateral as security in the event the borrower does not pay the loan back. Lenders typically accept things such as homes, cars, boats, and other high-value items as collateral.
Secured loans are very risky, especially when the borrower is at a high risk of defaulting. If the borrower does not repay the loan, then the lender gets to take possession of the collateral.
On the other hand, secured loans offer an advantage to unsecured loans. They typically offer lower interest rates and give you access to larger amounts of cash. Secured loans, like unsecured loans, can improve your credit score if you make your payments on time each month.
Oklahoma Allows Payday Loans -- with Caveats
Not only are they allowed, they are massively popular in Oklahoma. One in eight Oklahomans uses payday loans as a means to getting quick cash. In fact, there are more than double the amount of payday loan companies in Oklahoma than there are McDonald's.
There's a reason for their popularity, they're extremely expensive. Some payday loans can have interest rates as high as 1200%. In Oklahoma, you can expect your interest rate to only be as high as 390% due to restrictions on payday lenders.
Oklahoma does not allow borrowers to roll over their payday loans from period to period, meaning you cannot repay the loan and then reapply for the loan the same day. This is actually a benefit because it prevents borrowers from gradually taking out more and more money before ultimately becoming unable to repay the loan.
Know Your Credit Score Before You Apply
Many lenders have a credit score requirement before they will lend to you. Knowing your credit score enables you to select lenders who are likely to approve your loan. This is helpful because your credit score is impacted each time you apply for a loan.
Not sure where to go for your credit score? Many banks and credit card companies offer access to your credit score.
It is also helpful to know what is on your credit report so you know what you're up against. Federal law requires the three major credit reporting agencies to provide free copies of your credit report once every 12 months.
What Do You Need to Apply?
Most lenders will check your credit in order to determine whether you qualify for a loan, but there are a few other important pieces of information you need to apply.
First, lenders want to know how much you make and how long you have been at your current job. Your chances of approval are higher if you can demonstrate job stability. Many lenders will ask you to prove this through pay stubs or past taxes.
Some lenders will ask for a list of assets and a list of unsecured debts, like credit cards or medical bills. Finally, some may also ask for bank statements for your checking and savings accounts.
Be prepared with all this information when you sit down to apply for a loan.
What Negatively Impacts Your Chance of Approval?
The two main things that will get you turned down are a very low credit score and a lack of job stability. If those two things are present in your application, your chances of being approved are greatly reduced.
Other things that will have a negative impact are civil lawsuits in which you have been involved, judgments or liens against you, collection accounts, bankruptcy in the past ten years, and any type of foreclosure.
What Are Some Other Options for Oklahoma Poor Credit Loans?
If you're in a pinch and none of the other options have worked for you, there are a couple things you can try, but both involve help from friends or family members.
The first option is to ask close friends or family members for a loan. This can be a very difficult discussion for both of you, but you will likely pay much less for a loan from a friend or a family member than you would from a traditional lender.
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The second option is to find and a friend or family member to co-sign the loan. This means if you default, they will be on the hook for the balance of the loan.
Be sure you are able to repay the loan in both situations to prevent any strain in your relationships.
They May Ask About Your Ethnicity
If the lender asks about your ethnicity, don't panic!
It sounds discriminatory when you see the checkbox, but the government actually compiles data about who is applying for different types of loans. This data is used to make sure that minorities are not being discriminated against when they apply for loans.
Check Out Our Blog for More Financial Tips for People with Poor Credit
Trying to come up with money during an emergency when you have poor credit is an incredibly stressful situation. That doesn't mean that you have to pay out the nose for a loan.
Be aware of what your options are and assess the best route for you. Most importantly, don't put yourself in a situation that makes rebuilding your credit more difficult.
Check out our blog for more information on improving your financial wellbeing.
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