Credit is a touchy issue, especially for people who need loans, cash-in-hand, or have unexpected expenses pop up and don’t have the savings or safety net to pay them immediately.
VIP Finance of Texas understands that getting your money right can be difficult when life, credit cards, student debt, and mortgages are so expensive. That’s why we wanted to talk about the options for people with low (or no) credit who need a loan now.
There is no one-size-fits-all loan, but the closest thing to it is a low-interest loan. Meaning it has the lowest APR, or annual percentage rate. The lower the APR, the less expensive the loan, and the less expensive the loan, the more money you have to get your finances in order and pay off your debts faster.
Let’s take a look at four common loan types, their interest, and the ups and downs you need to know before making a decision.
Payday Loans (High Interest)
Payday loans have a bad reputation – and we aren’t going to defend them. A payday loan is often considered the most predatory of loans, because it is almost exclusively for people who cannot make their pay stretch the needed 7-14 days between checks.
It is also considered predatory because it is often a very short loan with very high interest, meaning you have only a short period of time to pay it back, and all the while it’s accruing huge fees and high interest.
Did you know that some payday loan interest rates are advertised at being right around 400%? That’s ridiculous and wrong, and yet they advertise it as if it were a good rate.
In the end, though payday loans are easy to get and require no credit check, they should be your very last resort.
Title Loans (High to Low Interest)
Title loans also have a bad reputation, and VIP Finance of Texas is trying to change that – not because we want to trick people into getting a title loan with just anybody, but because we know that our title loans are different.
How are they different? Let’s look below:
- A VIP Finance title loan has low APR of only 6%
- A VIP Finance title loan has long terms of up to 12 months, so you have time to pay it off
- A VIP Finance title loan is simple to understand, never tricky or predatory
- A VIP Finance title loan can be applied for online or in one of our many locations
The biggest reason most car title loans are a bad idea is that their interest rates are only slightly lower than payday loans’. But with VIP Finance of Texas, our APR is always just 6%!
The second biggest reason that people shy away from car title loans is that usually, the term is only 30 days, meaning you have to pay back the entire loan plus the interest in under a month – that’s hardly enough time to get your money right. Instead, VIP Finance title loans can have terms up to 12 months, so you have plenty of time to get your finances in order.
The bottom line for car title loans? Check the APR and the company, because they can be very good (like us) or very bad.
Personal Loan (Medium to Low Interest)
Personal loans have pluses and minuses – mainly because they usually require good credit if you want a good interest rate. Unfortunately, the inverse is true too, so if you have low or no credit, you’ll get an interest rate that makes payday loans and title loans look like a good deal.
Make sure you check to see if the personal loan you’re applying for has a breakdown of what interest rate they give for what credit score, or if they even check your credit score (which could lower your score further).
Check here to see some of the top personal loan companies, their rates, and their policies.
Also, learn more about how to raise your credit score here!
Credit Card Cash Advance (High to Medium Interest)
Credit card cash advances are sometimes still subject to credit checks, as you have to be able to have a credit card at least in order to qualify. Getting a credit card often requires decent credit in the first place, but even if you already have a credit card, the cash advance fees and rates are often extremely high (much higher than our 6%).
Though credit card cash advances are often thought of as being less predatory and less risky, over 35% of Americans still have credit card debt – meaning that the credit card companies are doing something right (for themselves, at least).
Make sure you know the fees, not just interest rates, and due dates for all of your cash advances, as you’ll have to pay it all back within a month.
If paying 100%, 200% or More for Your Loan Sounds Crazy – We Agree! Stop into VIP Finance of Texas for a Title Loan with Only 6% APR!
You can streamline the process even more by filling out your application online here.