Taking out personal loans for rebuilding credit is a counter-intuitive move, but it can help your credit score if you handle the money wisely. Five factors are used to calculate a credit score. Each factor has a different weight. This information will help you decide what loans you are able to afford.
Car loans
To rebuild your credit score, it is important to pay your car loan on time. Late payments will only slow down your credit repair efforts. There are decent car loans available for rebuilding credit. While it isn't easy to find a decent interest rate for a car loan with bad credit, it's possible to find a decent rate if you have a decent credit score and a positive payment history.
Lower credit scores often lead to higher interest rates. This is why it's so important to shop around and find the best deal. Alternativly, you could postpone purchasing a vehicle until you improve your credit score so that you qualify for a better rate.
Installment loans
If you pay your monthly payments on time and have good financial habits, installment loans can help to improve your credit score. These loans report to the credit bureaus every time you make a payment, which helps boost your credit score. However, be aware that late payments can seriously damage your credit score. If you don't make your monthly credit payments on time, then you need to find a new source of credit.
Before granting an installment loans, many lenders require a minimum credit score. Because borrowers with higher credit scores are more likely to repay the loan, this is why many lenders require a minimum credit score. However, some lenders will take your annual income into account when determining your interest rate.
Payday loans
Payday loans work well if you are in a pinch and need money quickly. These loans have a high rate of interest and are due back in two weeks. They are also not for the faint of heart. In fact, they can cause more damage than you might expect to your credit score and could even cost you more.
While a payday loan is fast and easy to get, it can be difficult to repay. Paying large monthly installments on payday loans is not a smart idea. Instead, opt for an installment loan that has fixed payments over a specific time period. These loans can be used to lower monthly payments for those with bad credit.
Installment loans with co-signers
A co-signer installment loan is available if you are working to improve your credit score and need cash to purchase a home or a vehicle. An installment loan with co-signers can reduce your credit score. Lenders view your credit history negatively and will not give you the best terms. They might repossess your collateral.
It is possible to get an installment loan without a cosigner. Most people who need a loan will ask a close family member or friend to sign on it. This commitment can lead to long-term problems and could even endanger a relationship. It is therefore a smart idea to explore other loan options.
Fairstone personal loans
Fairstone may be able to help you if you have poor credit or need to rebuild your credit. There are more than 240 branches in Canada and they offer both secured and unsecured personal loans. To determine if your loan eligibility, you can apply for a personal mortgage.
You can apply online, at Fairstone or at any branch. Although it is time-consuming, the process can be completed quickly. You can also send your documents and information via email. Although the application process is lengthy, it's much quicker than that of many other lenders. Fairstone has not posted many reviews of their personal loans online so it is difficult to evaluate the company's customer support.