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Bad Credit Central >> Online Personal Loans
Applying for a Bad Credit Personal Loan Online
by Brandon Cornett, 10/21/08
If you have are seeking a personal loan with bad credit, you may be interested in knowing you can apply for such a loan online. It's truly the most convenient way to go about it. But there's a lot you should know before applying online for a bad credit personal loan from a lender. In this article, we will cover some of those important points.
1. Determine How Bad Your Credit Is
The first thing you need to know is where you stand. By knowing just how bad your credit is, you can determine if it's even worth the effort to apply online for a personal loan from a lender. Let's be honest here ... if your score is below a certain point, it's going to be very difficult (if not impossible) to get qualified for a personal loan. So if you're not sure what your score is, you need to start by reviewing your credit reports and scores:
Get started here Order them through Credit.com
2. Understand the Current Economy
This guide was published in October 2008, at which time our economy was suffering a serious financial crisis. As a result of all the bad loans made over the years (particularly to home buyers), it's harder to get approved today. This is especially true when you have bad credit or a bankruptcy in your past. This is something you need to keep in mind when you apply for a personal loan online — in some cases, you simply may not be qualified or approved.
Now with that being said, I have a small piece of good news on the subject. It's easier to get approved for a personal loan than it is for a mortgage loan. The reason why is fairly obvious. There's a lot less money on the line, and therefore less risk to the lender. A personal loan is smaller, so you may not have as much trouble applying for one online as you would have with a larger loan. Still, it's important to understand what is going on in the economy, because it directly affects you when you apply online for a personal loan.
3. Research Online Lenders Before Applying
The Internet certainly makes applying for a personal loan more convenient. You can spend a few minutes online to get offers from several lenders at once. It sure beats driving all over town, especially with the cost of gas these days.
At the same time, however, the Internet brings a certain amount of risk. So you must do the necessary research to protect yourself (and your personal information) when you apply for a loan online. Google is my favorite tool for this purpose, and I recommend that you use it to conduct some online lender research. Do a search for the company's name and see what you can find. Do they appear legitimate? Is there any news about them online? Any complaints or warnings?
Here's a technical detail to watch out for when you apply for a personal loan through the Internet. Whenever you are asked to fill out an online form with your personal information, look up at the address bar at the top of your browser. The web address of that particular page should begin with "https" instead of just "http" (note that the first one has an 's' on it). That 's' means secure, and it tells you that the page has certain security and encryption features in place. Don't ever enter sensitive information, such as your SSN, into a web page unless it has the "https" prefix.
4. Apply for Your Personal Loan
If you have followed the recommended steps up to this point (and I sincerely hope that you do), you should be ready to apply online for a personal credit loan to get the ball rolling. Just make sure you conduct the all-important research covered in the previous step. The process for applying will vary slightly from one lender to the next. To help you understand what to expect, I visited the online loan-application pages of a dozen lenders and wrote down some of the common items they asked for.
Here's a summary of what most of the lenders asked for on their "apply online" pages:
- Full name and address of the applicant
- Date of birth
- Amount paid each month toward rent or mortgage
- The desired amount for your personal loan
- What the loan will be used for
- Employment info (current employer, gross annual income, etc.)
- Applicant's Social Security Number *
* The lender will use your SSN to do a credit check on you. Before you submit this information online when applying for a personal loan, double-check to ensure you are on a secure web page. Look for the "https" in the address bar. See step #3 above for more information.
Conclusion & Going Forward
I hope this guide to getting bad credit personal loans online has helped you understand how the process works. Remember, it's a tough economy right now. So a person with a low credit score faces some serious obstacles when approaching lenders. If you do get qualified, you'll pay a high interest rate on the principal amount borrowed (higher than a person with good credit). So before you leave this website, you might want to read up on the techniques for boosting your score.
