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5 Best Direct Lenders 🏆



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Finding a workable solution to alleviating debt when you have bad credit can feel impossible. Navigating high interest rates, loan terms, and making sure you can afford repayments throughout is stressful — to say the least.

This feeling is overwhelmingly felt by others in the current COVID-19 financial climate, with research showing the majority of Americans are struggling to minimize debt reduction.

The research also shows that 55% of us have some solid reasons behind this, including job loss and a lack of emergency savings. With no sign of this dissipating anytime soon, figuring out your best option to reduce debt is crucial.

Fortunately, there are legitimate loan options out there that can help alleviate your financial burden without ending up in a debt trap.

Installment loans for bad credit through direct lenders can be a lifeline for many right now. They offer flexibility and fair rates, and once they meet the recommendations set out by the financial regulators, they could be your best option.

In this review, we take you through the recommendations that aim to protect you. We also differentiate between installment loans and payday loans, and explain how exactly direct lenders work, but not before we highlight our top 6 installment loans for bad credit with direct lenders – sit tight!

Top Installment Loans for Bad Credit Borrowers

Here are our top six installment loans for bad credit:

1. Money Mutual
Best for Low Credit Scores
Best for Autopay & Online Payments
Best for Getting Funds Fast
4. Check Into Cash
Best Minimum Loan Amount
5. Green Light Cash
Best for Flexibility
6. Lend You
Best for High Loan Amounts

1. MoneyMutual: Best for Low Credit Scores

Money Mutual
Money Mutual is trusted by over 2,000,000+ customers throughout the state


  • Funding time is quick
  • Various payment options to choose from
  • Good choice of short-term loans with lower upper limits


  • Unable to predict loan terms and interest rates
  • Limited availability in comparison to competitors

MoneyMutual is another online marketplace that connects borrowers with lenders throughout the country. To date, Money Mutual has connected over 2,000,000 consumers with short term loans. The lender makes it quick and easy for borrowers to get a cash advance of up to $2,500  in as little as 24 hours or less.

  • MIN Loan Amount: $250
  • MAX Loan Amount: $2,500
  • Terms: Varies by lender
  • Rates and fees: Varies by lender

Turnaround Time: 24 hours

MoneyMutual’s selling point, and why the platform was created, was to give customers quick access to cash. The MoneyMutual’s website lays out the reason for its existence, “While many loan options can be time consuming, MoneyMutual was founded to provide consumers a marketplace where they can find short term lenders quickly & easily!

Note: This lender is not available in NY or CT.

Similarly to LendYou’s process, potential borrowers can access cash in just three steps 1) Fill out a short form to give the lenders some information to work with, 2) The lenders will review the information instantly to determine if you’re a suitable candidate for a loan, 3) If a lender can make an offer and work with you, the funds can be deposited in your account in only 24 hours.

The marketplace is free to use. The marketplace earns its money through the lenders in that if a lender decides it would like to work with you, it will give Money Mutual a fee to connect with you. The marketplace won’t get any information that will allow it to compare or evaluate offers from lender to lender. 

For this reason, MoneyMutual advises you to review all offers to receive carefully to make sure it meets your needs and all the terms are fully understood before you agree to anything.

All-in-all, there are a number of pros and cons with MoneyMutual. It should be noted, that you will need to be earning a minimum of $800 per month to qualify. The good news is that those with

bad or fair credit are welcomed with open arms.

2. Best for Autopay and Online Payments

Cashusa offers borrowers autopay and online payment options


  • Diverse offers
  • Variation of options
  • Quick funding process
  • Good loan range
  • No additional fees from the platform


  • Not a direct lender
  • Stricter requirements
  • No live support chat

CashUSA is the final online lending platform to make our list of the best installment loans for bad credit. The lending portal offers borrowers the chance to secure a personal loan from $500 to $10,000. Loans can be repaid over the course of 90 days up to 72 months with APRs typically ranging from 5.99% to 35.99%, which is pretty standard.

If you have fair credit, you might be better off considering the top personal loans for fair credit. These usually have better rates and terms because the borrower has a higher credit score. 

  • MIN Loan Amount: $500
  • MAX Loan Amount: $10,000
  • Terms: 3 – 72 months
  • Rates and fees: 5.99% – 35.99%

Turnaround Time: 1 business day

The lending process with CashUSA is pretty clear and straightforward, but it also offers borrowers some additional benefits. 

First off, the loan request process is fast. Unlike loan applications to traditional banks, your online request will be processed quickly through CashUSA.

In fact, the loan request usually goes to lenders instantly. Considering some banks can take weeks to process a loan, it’s pretty impressive.

The CashUSA website is fully secure. The security of a website is a vital aspect for anyone looking to borrow online to consider. CashUSA uses extremely advanced encryption technology to keep all of your information in safe hands.

A key feature about CashUSA is how convenient it is to make payments. All of your payments can be made directly online. This means you won’t need to worry about late fees as a result of a delayed or lost payment. 

Additionally, CashUSA lenders allow you to set up autopayments for the utmost of convenience. With this, you won’t need to think about making your monthly loan payment ever again – it’s a fool proof way of keeping your repayments in good standing.

Most importantly, those with bad credit won’t be written off from getting a loan. People with bad, and even the worst credit score, can work with CashUSA, too. CashUSA is known as one of the premier bad credit loans with guaranteed approval out there, and is rated as number one in our review.

3. Best for Getting Funds Fast

Bad Credit Loans
Badcreditloans offers borrowers with bad credit accessible loans


  • Extended repayment period
  • Fast cash
  • Low minimum amount


  • Higher interest rates
  • Additional fees

As the name suggests, BadCreditLoans helps connect people with bad credit to lenders in their time of need. The financial marketplace has been around since 1998, acting as an advocate for consumers and matching them with a network of lenders willing to front up the cash to people with bad credit.

  • MIN Loan Amount: $500
  • MAX Loan Amount: $5,000
  • Terms: 3-60 months
  • Rates and fees: 5.99% – 35.99%

Turnaround Time: 1 business day

The website also displays an in-depth, informative news section where you can keep an eye on the latest scams, best practices to help you improve your credit score, and an array of other contributions make BadCreditLoans an invaluable source of information for anyone in need of financial guidance.

Though Americans paid off $60 billion in debt before COVID-19, WalletHub now projects that Americans will take on $140 million in credit card debt throughout the rest of 2020. This debt will only add to the stress on those financially struggling.

If you have several different sources of debt, checking out the top debt consolidation loans could be your next best step. Debt consolidation loans offer an effective way to manage and streamline your debts or credit card payments, not to mention coming with several other advantages.

The APR offers with BadCreditLoans can reach up to 35.99% – this is almost double that of the average credit card. If your credit is particularly low, you could also be restricted to a lower loan limit.

To put the APR into perspective, let’s say you borrowed $1,000 at a rate of 35.99% and needed 36 months to repay it. You would pay $643 on interest alone.

However, to apply for a loan with BadCreditLoans you will need to provide some standard information like your name, address, and social security number. From there, a BadCreditLoans representative will put you in touch with a web of lenders where you can choose from an assortment of loans. 

If you agree to the terms of a loan you’re offered, you can authenticate the loan online, and potentially receive the loan the following business day.

4. Check Into Cash: Best Minimum Loan Amount

Check Into Cash
Check Into Cash offers borrowers a quick turnaround time and a low minimum loan amount


  • Minimum loan amount
  • Quick turnaround time


  • Payoff options are not transparent 

Founded in Tennessee in 1993, Check into cash has a long record of offering customers personal installment loans, Payday loans, title loans, and more all at affordable rates and convenient payment options.

Check Into Cash aims to help people that have been met with unexpected expenses, are in a money crunch between pay cheques, or for whatever reason, need some financial assistance over the short term.

  • MIN Loan Amount: $300
  • MAX Loan Amount: $1,500
  • Terms: Varies by state
  • Rates and fees: 261% to 782% APR
  • Turnaround Time: 1 business day

The small-dollar, short-term lender offers installment loans starting at just $300 and increasing to $1,500. That said, new customers can expect to borrow just $750, or whatever their state maximum is.

Unlike Money Mutual, Check Into Cash is a direct lender. The financial company offers short-term loans specifically for those with bad credit including installment loans, auto title loans, lines of credit, payday loans and flex loans.

The lender offers an extreme APR range starting at 261% and going all the way up to 782%. A particular downfall with this lender is that its payoff options are not very clear. After 27 years in the business, it could do better. 

Furthermore, you could be met with some additional fees if you need some more time to repay the loan. While there are a few fees you should be on top of, they vary by state and include insufficient fund fees and late fees. 

Though these rates are high, Check Into Cash offers accessible loans to those with bad credit. In March, five federal regulatory agencies released a joint statement recognizing the dire need for such lenders in the wake of COVID-19. 

The statement takes a balanced approach towards short-term loans, acknowledging that while there is a need to protect consumers, eliminating financial options that serve as a lifeline for many is not the solution. Instead it has enforced codifying principles for organizations to offer loans in a responsible manner.

For Check Into Cash customers in select states, those who make a late payment and get hit with some fees, will be offered an Extended Payment Plan. It’s not too far from the one Cash Central offers, but it incurs interest at the same rate until you’ve repaid the original amount and the additional fees.

The Check Into Cash process is quick, and customers can be connected with funds within one business day of applying. To apply, you’ll just need a few standard items including your driver’s license or photo ID, social security information, a bank statement or your checking number, bank routing number, and proof of address – all pretty straight forward.

To apply, you can fill out the form on their website which will take all of about five minutes. Then, a Check Into Cash representative will be on the phone to you in no time going through the application process with you.

5. Greenlight Cash: Best for Flexibility

Greenlight Cash is the most flexible marketplace for bad credit borrowers


  • Unrivaled flexibility and accessibility.
  • Predictable monthly payments
  • Quick and simplified borrowing process
  • Any credit is welcome

Greenlight Cash is an online platform that hooks consumers up with a web of reliable lenders throughout the country. In essence, the platform gives customers the green light for installment loans. 

This marketplace partners with a wide network of professionals, giving you the opportunity to team up with them and begin working on conquering your financial situation in an effective way. Just hit submit, and you’ll be one step closer to your funds.

  • MIN Loan Amount: $1,000
  • MAX Loan Amount: $5,000
  • Terms: Varies by lender
  • Rates and fees: 6.63% APR to 250% APR typically
  • Turnaround Time: 1-2 business day

Typically, installment loans come with an expansive range from 4.99% to 450%. Since GreenLightCash plays no part in the lending process itself, an accurate APR can’t be predicted. If you are suffering from credit card debt, we suggest you have a good understanding of how debt consolidation works before applying.

To apply for a loan with GreenLightCash just fill out a standard application form, get matched with a lender, and once you give the rates and terms the green light, you will get your money within 1-2 business days. 

Before applying, there are some eligibility criteria you’ll need to meet. These include being a U.S resident, being over 18, having a stable income, and being currently employed.

If you agree to the terms and conditions of the loan, you are entering into a contract to follow through on your side of the repayments. In the event that you don’t meet your payments on time, you might be required to pay some additional fees. Late payment fees will vary from lender to lender.

6. LendYou: Best for High Loan Amounts

LendYou offers borrowers high installment loan amounts of up to $15,000


  • High loan amounts of up to $15,000 
  • Minimal restrictions on the loan purpose
  • No collateral or guarantor needed

LendYou connects borrowers to lenders to help those looking for short term, unsecured loans. If you need some extra cash to help you with a large purchase, car payment or unexpected expense, LendYou offers a network that gives you options.

When you apply, your application will be sent to LendYou’s affiliate lenders. Should a lender think that you match their criteria for a loan, you could receive a loan offer.

  • MIN Loan Amount: $100
  • MAX Loan Amount: $35000
  • Terms: Varies by lender
  • Rates and fees: Starting at 4.99% APR
  • Turnaround Time: 1 business day

Loans are offered anywhere up to $15,000. The amount you receive will depend on the lender, your application, and your state.

Not only does LendYou offer installment loans, borrowers can access Payday loans and Personal loans too. The structure of the LendYou platform is set up to give you the opportunity to get the best loan rates and terms for you.

Keep in mind, as LendYou is not a lender, it doesn’t make any of the terms or credit decisions. If you’re struggling to make credit card payments, you could also check out the top 5 debt consolidation loans for bad credit borrowers. Debt consolidation will allow you to compile multiple credit card payments into one streamlined payment plan with lower interest rates.

That said, a highlight of this platform is that the whole process is quite fast and done in real time. In total, there are just three steps to take to secure a lons: 1) Online registration, 2) Offer received with loan terms and conditions, 3) If you agree with the loan terms, the money could be with you as soon as the next business day.

To be accepted for a loan, there are some approval requirements you must meet like being older than 18 years old, being a U.S citizen, having a valid checking or savings account with a direct deposit, and earning a minimum regular income of $1,000 per month.

So, why choose LendYou? 

To sum up, you could receive a loan of up to $15,000, there are minimal restrictions on how you chose to use the loan, you won’t need to tie any assets to the loan, and of course, those with bad credit who want guaranteed approval, should be okay with this lender.

Covid-19, the Poverty Line, & the Struggle to Minimize Debt

With hundreds of millions due to become unemployed, COVID-19 is having a disastrous impact on our socio-economic state.

Yet, Professor Philip Alston, a leading human rights expert recently released a five year tenure that has tied this more broadly to our political and human rights failures. Alston identifies the crisis the world is now facing as having five elements, the Covid-19 pandemic, extreme inequality, devastating climate change, a deep economic crisis, and a movement fighting racist systems throughout numerous countries. 

Essentially, Alston suggests that the poverty people are now facing has only been exacerbated by, not caused by, the pandemic.

Furthermore, a recent report released by the National Foundation for Credit Counseling (NFCC) and BAI on consumer spending in light of COVID-19, showed that 55% are struggling to repay their debt during the pandemic. 

With this, Americans are about to take on more than $140 billion in credit card debt. This shows that our struggle is bound in some complex factors that will not dissipate anytime soon. So, what can you do to help alleviate your financial distress?

Tips on Managing Debt

Here are our top five steps to helping you alleviate financial debt.

1.Create a budget and don’t diverge from it too much: Make sure you understand where all your money is going and then rank all your expenses including emergency fund contributions, and debt payments.

2. Create an emergency fund: One reason people get into debt is because they don’t have a fund for emergency situations. Try and save about 12 months of your income to have something to fall back on. 

3. Increase your credit score: Better credit will help you pay off your debt quicker. It can also help you find a place to live easier or find a job.

4. Repay your biggest debt first: Most of the time, if someone is in serious debt, they have multiple balances. In this case, paying off the biggest payment first is the best call. Alternatively, you could consider debt consolidation.

5. Evaluate your current job: It won’t matter how much you save or budget if you don’t have enough money. In this case, working out whether there are higher paying positions for someone with your experience or skills could be the best option.

A Buyer’s Guide to Installment Loans

In this guide, we are going to explain what exactly an installment loan is and how it works, how they differ from payday loans, and how direct lenders work, to name a few.

What is an Installment Loan?

An installment loan is an umbrella term that refers to the bulk of both commercial and personal loans extended to borrowers. With credit card transactions dropping as a result of COVID-19, it seems fitting that installment loans fill the niche. If this is the case, understanding how exactly installment loans work is a good place to start.

How Do Installment Loans Work?

Within this umbrella, an installment loan is a loan that is to be repaid with regularly scheduled payments or installments. For every payment made on an installment debt, a borrower will pay a portion of the principal amount borrowed, in addition to paying interest on the debt.

The amount repaid towards each regular loan payment is determined by some key variables including the initial loan amount received, the interest rate, and the length or time that the loan will take to be repaid, also known as the loan term. The regular payment amount also stays the same throughout the repayment period, making it easier for the borrower to budget to meet all required payments.

You should consider monitoring your credit to make sure that it doesn’t fall below where you expect it to be. Using a top credit monitoring service could go a long way when it comes to securing better loan terms and rates.

Installment Loans vs Payday Loans: Which is Better?

As we just outlined, installment loans cover the bulk of car loans, mortgages, and other personal loans, to be repaid over a longer term. They also generally require credit checks. 

On the other hand, payday loans have a much shorter payment term, with higher interest rates. No credit check is needed for this loan type. Here’s a brief explanation of both installment loans and payday loans.

Installment Loans

Installment loans can refer to a diverse range of loans – car loans, mortgages, boat loans – but the installment loans that can be compared to payday loans are usually categorized as personal loans.

With installment loans, you receive a lump sum straight up. Then, you repay a set amount of money each month of the agreed length of the loan term. The term range can be anywhere from 2 years to 30 years. Personal installment loans, however, tend to be about 12 months.

Installment loans can refer to a diverse range of loans – car loans, mortgages, boat loans – but the installment loans that can be compared to payday loans are usually categorized as personal loans.

With installment loans, you receive a lump sum straight up. Then, you repay a set amount of money each month of the agreed length of the loan term. The term range can be anywhere from 2 years to 30 years. Personal installment loans, however, tend to be about 12 months.

Legit personal installment loans conduct a credit check and a quite lengthy application process. You will usually get a much more favourable rate on a personal loan than you would on any payday loan.

Legit personal installment loans conduct a credit check and a quite lengthy application process. You will usually get a much more favourable rate on a personal loan than you would on any payday loan.

Payday Loans

Payday loans, on the other hand, are usually under $1,000 and are due on the borrowers next payday – and so derives the name. In most cases, a post-dated check is written, or access is given to the bank account to allow the lender to withdraw the funds automatically on the date your wage is due.

The issue arises with payday loans when you can’t keep up with repayments. While you will be allowed to push the loan back to your next payday, you will be charged an increased amount of interest. You’ll more than likely be met with some harsh late fees too.

In fact, fees are so harsh that they average around 400%. Not to forget, there are additional fees and penalties that come along with this.

This is compounded by the fact that under a new rule from the Consumer Financial Protection Bureau, Payday loan lenders won’t have to check whether borrowers can afford loans. Although the CFPB is positioning this as a way to make the marketplace more accessible, it is a rollback of a provision set in place by the Obama administration in 2017, which was created to protect consumers from taking out loans with expensive interest rates. With this new rule, lenders are no longer obligated to assess whether consumers will likely be able to repay the loan in the agreed time.

The most significant part to note about this is that if you fall behind on payments, the interest snowballs, leaving you in what we call a payday loan trap. Should you get stuck in one, you could find it hard to get out.

Key Benefits of Installment Loans

Collateral Loans vs. Non-Collateral Loans

Installments loans can come either with a collateral or non-collateral requirement. Mortgage loans, for example, require the house that the loan is being used to buy, as collateral. The collateral for a house is the house you buy with the loan.

Some installment loans (otherwise known as personal loans) can be extended without the need for collateral. These loans require the borrower to have a good credit score, and a proven ability to repay the loan based on their assets and/or income. 

Despite the economic and financial hardships caused by COVID-19, homeowners are remodelling their homes in droves. This likely means more people will be accessing non-collateralized, personal loans..

Unfortunately for these remodelers, personal loans, or loans that come without collateral, tend to have higher interest rates than collateralized loans, reflecting the increased risk attached should a lender not repay the loan. To help you get the best rates possible, learning how to understand your credit score correctly could be a life (or money, more accurately) saver.

What is the Installment Loan Process?

  1. Fill out an application
  2. Speak with the lender about available options
  3. Figure out what your best options are before agreeing to the loan

Here’s the breakdown for the process of applying for an installment loan. First, an application needs to be filled out with the lender, usually covering some standard questions such as what you want to use the loan for, like a boat. The lender will speak with the applicant and provide several options about the best solution to repaying a loan ie. the loan terms, payment amounts, and payment schedule.

For example, let’s consider someone who wants to get a loan of $10,000 to buy a car. The lender will let the borrower know that were they to make a bigger down payment, they could secure better interest rates, or perhaps a lower monthly payment by taking out a loan over a longer term. In addition, the lender will review the borrowers creditworthiness to help determine an acceptable loan amount and loan terms.

Ordinarily, the borrower retires the loan by making the agreed payments. Borrowers could potentially save on interest by paying off the loan early, before the end of the loan term. This isn’t always the case, however, and sometimes prepayment penalties can be charged for paying off the loan early.

Before going through the loan process, consider whether getting something removed from your credit report would help improve your credit score. This could help you secure better loan terms and rates.

Advantages and Disadvantages of an Installment Loan

So, what are the main advantages and disadvantages of an installment loan? Crucially, installment loans offer flexibility, and can be easily twisted and turned to meet your individual needs when it comes to the length of time you would like to repay the loan over.

Additionally, installment loans allow you to secure financing and a considerably lower interest rate that you would be able to with revolving credit financing, like credit cards. This way, you will have more cash to use for other reasons, as opposed to making one bigger cash expense.

When it comes to longer-term loans, a disadvantage might be that you are required to make payments on a  fixed-interest loan at an increased interest rate than the prevailing market rate.

Another key disadvantage of the installment loan stems from the obvious fact that you will be sealed into a long-term financial commitment.
In the future, circumstances might render you unable to meet the agreed payments any longer, possibly defaults, and forfeiture, and collateral that was tied to the loan. However, finding a top credit repair company could help improve your chances of getting better rates and being able to continue your repayment plan. solve these issues by increasing your credit score.

What Are Online Direct Lenders?

Marketplaces don’t directly fund your loan. Instead, you’ll complete an initial application on their website and a lender will be in touch if they think you are a suitable candidate. 

Online direct lenders, on the other hand, are financial institutions that fund your loan directly, once approved of course. These lenders comply with both state and federal laws. This means they are held accountable to the lending rules and regulations imposed by the relevant state/s.

How Do Online Loans From Direct Lenders Work?

When you apply for a loan with an online direct lender, all your interactions and communication will, more than likely, all be with one financial institution. This concerns the application process, the approval process, funding process, and repaying the loan.

When it comes to online direct lenders, the bulk of the process is done online. This makes loans more accessible and convenient, especially during a time of social distancing.


Installment loans can offer a welcome relief for many of us struggling to make ends meet throughout the COVID-19 pandemic. They come with several benefits includings, offering lower interest rates and flexibility. Though MoneyMutual is our best overall, each lender on our list offers different benefits therefore, we advise you conduct further research to establish the best option for your individual needs.

Although some short term loans can come with increased interest rates, regulatory agencies do recognize the benefits of these lenders for consumers in need. A recent survey highlighting those unable to pay as tax day arrival approaches, only serves to reinforce the need for short term lenders during the current economic and financial climate, so long as loans are offered in a responsible manner.

None-the-less, with lenders no longer being required to check whether you can afford to repay the loan, it is vital that you make your own calculations and assessments to avoid a long-term debt trap.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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Bad Credit

How To Find A Co-Signer For A Loan – Forbes Advisor



If you need to borrow money and your financial situation isn’t the strongest, you might be able to boost your odds of approval by seeking out a co-signer. And on the flip side, if you have good credit and a strong income, it’s possible that someone might come to you and ask you to co-sign for their loan.

The truth is that co-signing on a loan can be a win-win for both parties, but it can also result in broken relationships, destroyed credit and financial hardships for the borrower and the co-signer. In order to forge a successful co-signer relationship, you need to know exactly what a co-signer is, how the arrangement works and how to dodge potential pitfalls.

What Is a Co-signer?

A co-signer is a secondary person who agrees to pay back a loan in case the primary borrower defaults (i.e., doesn’t pay it back). When you co-sign on a loan, the loan is recorded on both your credit report and on the main borrower’s credit report. As long as they make on-time payments, you’ll get the benefit of those marks too. However, if the borrower misses a payment or just stops paying on the loan entirely, you’ll be on the hook for the loan. And if you fail to pay up, the lender can actually take you to court for the money.

If you’re looking to borrow money, lenders generally require you to get a co-signer if you have bad credit or no credit, limited income or something else that makes you a lending risk. This is commonly the case for young people who are just starting to build their finances, and who may not have any credit history yet. For example, roughly 90% of all private student loans were made with a co-signer during the 2019/2020 school year according to MeasureOne, a data analytics company.

However, not all lenders accept co-signers, so if you have a limited credit history and think you’ll need help qualifying, it’s best to confirm with the lender before applying.

When a Co-signer Makes Sense

Using a co-signer on your loan can make sense in a lot of cases:

  • You have bad credit
  • You don’t have much income
  • You’re young and you don’t yet have credit in your name

Using a co-signer can help you overcome these barriers so you can get approved for a loan. You may even be able to get lower interest rates if you and your co-signer are approved.

But in order for this setup to work, you’ll need to have a few things in place:

  • Trust between the borrower and the co-signer. The borrower is asking a lot of the co-signer, and so you’ll want to make sure you trust each other.
  • The co-signer needs to have a good credit score. If the co-signer’s credit is the same as yours—or worse—they may not be approved to co-sign on the loan.
  • The co-signer needs to be able to pay the loan on their own. If the borrower defaults on the loan, a co-signer should be able to comfortably afford the payments on their own.

Co-signer vs. Co-borrower

A co-signer is someone who agrees to be a backup for the loan payments. A co-borrower, on the other hand, is someone who’s equally liable for each payment (i.e., before it’s past-due), and who typically also shares ownership rights for whatever the loan was for.

For example, a husband-and-wife team may be co-borrowers on a loan for a house and both listed on the title. This means they own the home equally, and are both responsible for making payments each month.

But if a parent co-signs on their kid’s car loan, they aren’t first in line to make the payments. The lender only contacts them for payment if their kid doesn’t pay up. They also don’t have any ownership rights in the car—even though they’re on the hook to pay for it.

How to Find a Co-signer

Just about anyone can be a co-signer. But since you both need to trust each other, it’s more common to use friends and family with whom you already have an existing and healthy relationship.

If you need a co-signer, make sure you consider who to ask carefully. This is a big ask of them. You’ll need to be open when discussing your financial situation, and they’ll need to be comfortable with disclosing their financial situation, too.

It’s entirely possible that your first choice for co-signer may not be able to comfortably take on the financial responsibilities. If that’s the case, you need to be able to let them off the hook gracefully. Even if they are financially able to co-sign for you, they may not want to take the risk, and you need to be understanding of that.

In fact, it’s entirely possible that you may not have anyone close enough to you who could be a good co-signer. In this case, it may be necessary to consider some popular alternatives to a co-signer arrangement.

Co-signer Alternatives

Not everyone is able to use a co-signer, and that’s OK. But that doesn’t mean you’re out of luck. Here are a few other options to try:

Shopping Around With Other Lenders

The world is full of all types of lenders, some of whom specialize in the types of loan applicants who traditionally need a co-signer. These “bad credit loans” can be a good (if expensive) alternative, but you’ll want to be careful here as there are a lot of shady lenders.

Here are two important things to ask of any bad credit loan lender:

  • What are the rates and fees? Avoid short-term payday loans, which typically charge APRs of 400%, compared to the average two-year personal loan at 9.34% APR.
  • Do you report to the credit bureaus? This will help you build credit, so you don’t need to rely on these types of lenders in the future.

Use Collateral

You might not have a person who can guarantee your loan, but you might have property. Collateral refers to something you own that you agree to give to the lender in case you default on the loan. If a loan has collateral, it’s called a secured loan. Common secured loans include auto loans, mortgages and even some personal loans.

If your lender allows it, you may be able to qualify by agreeing to use something valuable you own as collateral. But remember, if you put up your car as collateral, for example, and fail to pay the loan, your lender can repossess your car.

Ask Friends and Family

If your friends and family are financially stable and willing to lend you the money but prefer not to co-sign on a loan, consider asking them for the money outright. You could ask for it as a gift, or better yet, a loan that you repay back to them.

If you opt for the loan route, make sure you draft up a legal agreement of your own. This reduces the likelihood that your relationship will sour over time if your co-signer feels like they aren’t getting paid back according to schedule. You don’t want to be that family member they’re always hounding for cash.

Go to a Credit Union

Credit unions are often more willing to work with you than banks or other lenders. Of course, it’s not a free-for-all and you will need to meet their loan requirements. But if you’re having a hard time getting approved elsewhere, it might be worth stopping by a credit union in your area to see if they can help.

The downside is that credit unions have their own membership requirements which you’ll need to meet before you apply.

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Fall 2020 Brings Increased Regulatory Focus on Financial Institution Detection of Human Trafficking | Moore & Van Allen PLLC



On October 15, 2020, the Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) released its Supplemental Advisory on Identifying and Reporting Human Trafficking and Related Activity (Supplemental Advisory). The last time FinCEN provided guidance on identifying trafficking in anti-money laundering (AML) processes was in Guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking – Financial Red Flags on September 11, 2014. The evolving tactics of human traffickers and behaviors of victims required updated guidance in order for financial institutions to better meet Bank Secrecy Act (BSA) obligations to assist the government in detecting and preventing money laundering. 

The Supplemental Advisory focuses on four emerging tactics used by human traffickers to carry out and hide the proceeds from their illicit operations: front companies, exploitative employment practices, funnel accounts, and alternative payment methods. Front companies are lawful, licensed, and registered businesses which are used by traffickers to comingle the illicit proceeds generated from their scheme of human exploitation with that of a legitimate business. Examples include massage parlors, nail salons, even electrician services, and faith-based mission work. 

Labor trafficking can be harder to detect than sex trafficking for AML departments. FinCEN’s Supplemental Advisory alerts financial institutions to examples of exploitative labor practices, including visa fraud, wage withholding, and recruitment fee advances. Note that in 2019, the Federal Acquisition Regulation: Combating Trafficking in Persons was amended to address prohibited recruitment fees and broadened contractor responsibility for violative recruitment fees in supply chains. 

Funnel accounts continue to be a common tactic wherein a trafficker coerces a victim to open one or more bank accounts in their own name, and then directs them to deposit, transfer, wire, and withdraw monies in amounts below a reporting threshold, for the benefit the trafficker or the enterprise. Because the accounts are often held exclusively in the victims’ names, the trafficker remains anonymous. 

Such account activity may lead to an Unusual Activity Report or Suspicious Activity Report but that would erroneously target the victim, not the perpetrator. Accounts may be closed by the financial institution, or at the direction of the trafficker, following overdraft or low balances, which can cause victims to incur bad credit status and prevent them from accessing financial services in the future. 

The Supplemental Advisory further alerts financial institutions to the prolific use of prepaid cards, virtual currencies, smartphone cash applications, and third-party payment processors to advertise their sex trafficking business and receive payment. 

Although the indicators list addended to the Supplemental Advisory is not significantly different than past iterations, it adds a set of case studies. Specific perpetrator and victim vignettes are effective in modernizing detection tools as they allow financial institutions to keep their pulse on real life examples relayed by law enforcement and survivor advocates. The Supplemental Advisory also reminds financial institutions that they are protected from liability for information sharing afforded under Section 314(b) of the USA Patriot Act. Traffickers often implicate multiple financial institutions and only through a wider lens and open communication can otherwise lawful-appearing activity be identified as suspicious.  

Finally, the Supplemental Advisory notes FinCEN’s Customer Due Diligence Rule, promulgated in 2018, which generally requires some financial institutions to identify beneficial owners of commercial customers. Under the Trafficking Victims Protection Act, “whoever knowingly benefits, financially or by receiving anything of value” may be subject to criminal and civil liability. Therefore, diligence and monitoring processes are to include potential third-party participants in an exploitive scheme.  

FinCEN’s advisory on human trafficking is timely. In the last few months, regulators have signaled increased attention on financial institution responses to human trafficking. This past summer, Deutsche Bank was fined $150M by The New York State Department of Financial Services (“NYDFS”) for compliance failures related to client Jeffrey Epstein, his sex trafficking enterprise and correspondent banks. In the Consent Order, NYDFS found the Deutsche Bank “conducted business in an unsafe and unsound manner [and] failed to maintain an effective and compliant anti-money laundering program.” This September, Westpac Bank was fined $920M USD by the Australian Transaction Reports and Analysis Centre (Australia’s financial intelligence, anti-money laundering and counter-terrorism regulator) for failures in AML reporting, record keeping and detection, including transfers indicative of child sex trafficking. This fine is the largest paid to an Australian regulator for violation of money laundering laws to date. Also in September, the United Kingdom announced that the U.K. Modern Slavery Act of 2015 will be strengthened to (i) allocate more funding to enforce its requirements and (ii) mandate that companies’ modern slavery statements cover certain topics ranging from due diligence to risk assessment. 

Increased regulatory focus on financial institution responses to human trafficking deserves attention.

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Can I Negotiate a Bad Credit Auto Loan?



Yes, you can negotiate your deal on a bad credit car loan, though you may not have the same leverage as someone with a better credit score. Without the strength of a high credit score behind you, you may not be able to qualify for as low of an interest rate or monthly payment as you’re looking for. But a lot of things associated with an auto loan can be negotiated.

Preparing to Negotiate a Bad Credit Auto Loan

Before you go toe-to-toe with a dealer, make sure you know what kind of power you have in this arena. This means knowing your credit score and what’s on your credit reports. Without this information, you’re powerless to push back against a lender’s assessment of your credit situation.

Auto Credit Express Tip: Remember, you’re most likely going to be interacting with the special finance manager at a dealership, who talks to the lender on your behalf. The dealer isn’t responsible for the rates and terms you qualify for, and the lender can’t determine how much a dealership is willing to cut a deal.

The only way to know you deserve better terms than you’re being offered is to do your research. Find out what the average car loan looks like for people in similar situations. You don’t want to go into a dealer with unrealistic expectations.

  1. First, get your credit score and credit reports. Now is a great time to do this, because the three major credit bureaus – TransUnion, Experian, and Equifax – are offering U.S. consumers free weekly access to their credit reports. This deal only lasts until April 2021; you can request a copy of your reports by visiting
  2. Next, look online for some national averages on auto lending interest rates and see where you fall on the FICO credit scoring model. Knowing where you stand enables you to prepare for the next steps in your car loan: your budget.
  3. The final step to getting ready to negotiate on your auto loan is to plan your car buying budget. If you don’t know what you have to work with, or how to accurately calculate the out-the-door and overall costs of your auto loan, then you won’t have a leg to stand on when talking to a dealership.

What Are You Negotiating For?

Without a plan or a budget to refer to, you can’t have a goal to negotiate for. When it comes to a bad credit car loan, there’s no point in negotiating just because you can.

You should have a set goal in mind, whether it’s a target interest rate, a specific loan term, or a set monthly payment amount. Don’t give these things away to the dealer, though. Keeping your numbers close to the vest is what gives you the power to make a deal on your terms.

In order to get an auto loan deal you can live with, you have to know what you can afford. To find this out, you can do a few simple calculations that the lender does when determining if your budget can handle a car loan. This is your debt to income (DTI) ratio.

Your DTI ratio lets you know how much of your monthly finances are already being used by your existing monthly bills, including an auto loan and car insurance. If you’re using more than 45% to 50% of your monthly income, a lender may not be willing to add to that burden.

To see how much auto loan you could qualify for, and to find out if those monthly payments fit into your budget, you can check out our car loan and monthly payment calculators.

Know What You Can Negotiate

In order to negotiate on your bad credit auto loan, you have to know what you can and can’t change your lender’s mind on. Not everything on a car loan contract is negotiable.

Here’s a look at what you can have a crack at negotiating:

  • Can I Negotiate a Bad Credit Car Loan?Vehicle selling price – The first thing you should know you can negotiate on when it comes to an auto loan is the price of the car. The sticker price on a new vehicle typically lists the MSRP, or manufacturer suggested sale price, and may list a dealership price, too. You can ask for any price you want, but the dealer may not agree to honor it.
  • Your interest rate – Your APR is likely to be a bit higher than you’d like with bad credit, but you can always ask a dealership or lender if what they’re offering is the best rate you qualify for. Often it’s not, there’s no rule that says dealers have to offer you the lowest rate or best deal that you’re qualified for by a lender. With that said, you don’t have to accept a deal that stretches you too thin, either.
  • Your loan term – Shorter loan terms mean higher monthly payments, but stretching your loan too long means a higher overall cost. Being a payment shopper, only looking at the monthly payment and ignoring the overall loan cost, isn’t the place to be with poor credit.
  • Down payment amount – When you have credit challenges, you generally have to meet a down payment requirement set by your lender. However, it may not be set in stone. Depending on your other rates and terms, you may be able to negotiate the amount you need up front.
  • Your trade-in – If you’re using a trade-in to cover some of your down payment amount, you may be able to negotiate what you’re getting out of it. It also helps to know the value of your trade-in before you head to the dealership so you can have more leverage in negotiation.
  • Prepayment penalties – If you have to take on a longer term to get a more favorable monthly payment, you can save money in the long run by paying more on your loan whenever possible. Look over your contract carefully to make sure you aren’t penalized for this, or ask the lender to remove the clause if you are.
  • Optional features and equipment – Some features on the vehicle you’re choosing could be optional, and carry additional fees which can be negotiated on. Things like window tinting, fabric protection, and certain optional packages like wheel protection or cargo nets could be charges coming from the dealer. You don’t have to agree to these. This also goes for extended warranties and GAP insurance coverage.
  • Dealership documentation fees – A “doc fee” on any auto loan contract, which dealers charge for preparing your paperwork and talking to the lender on your behalf, is pretty standard, but the amount varies. There’s no reason to pay through the nose for this, and many states cap the amount you can be charged. Expect a minimum doc fee, but try to lower it as much as possible.

With all these things to haggle over, there are three main things that are non-negotiable when it comes to a car loan (which are set by the state, so there’s no getting around them):

  1. Taxes
  2. Title fees
  3. License fees

Ready to Negotiate Your Next Car Loan?

If you’ve tried negotiating on a bad credit auto loan in the past and were unsuccessful, don’t give up! Just because one dealership isn’t willing to work with you doesn’t mean that others aren’t.

Remember to keep your search for a car loan to a two-week window. If you apply for multiple loans of the same kind with different lenders within that time frame, you stop multiple hard credit inquiries from affecting your credit score.

Additionally, when you have bad credit and need an auto loan, it’s in your best interest to make sure you’re applying with a subprime lender at a special finance dealer. These lenders are able to help people in many tough credit situations, such as bad credit, no credit, and even bankruptcy.

Here at Auto Credit Express, we’ve cultivated a nationwide network of special finance dealerships, and we want to get you matched to one in your area! We’ll get right to work for you after you fill out our fast, free, and zero-obligation car loan request form.

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