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- It’s not impossible to get a loan with bad credit, but you’ll need to consider all of your options.
- Your credit score and your debt to income ratio can impact the rates lenders are willing to offer you, so you’ll want to know yours before applying for a loan.
- Borrowers with bad credit can consider approaching credit unions or online lenders, both of which tend to be able to offer lower interest rates than traditional banks.
- They may also want to consider getting a secured loan, or getting a cosigner to guarantee the loan. However, a secured loan puts collateral like a house or car at risk, and a cosigner becomes responsible for loan payments should lenders be unable to pay.
- Visit Business Insider’s homepage for more stories.
Getting a loan with bad credit can be challenging, but it’s not impossible. There are several ways to boost your chances for being approved for a loan. We’ve asked experts how to get the loan you need, even if you have bad credit.
1. Understand how your credit score affects interest rates
Generally, a credit score is the most important factor in deciding what interest rate a lender will offer you. “Although many lenders offer personal loans to borrowers with only fair credit, you can expect to pay higher interest rates,” says Jamie Young, personal financial expert with Credible, an online loan marketplace.
No matter what your credit score, it’s important to check rates with multiple lenders to see who will offer you the best rate and terms. “If your credit score is low, don’t assume that if you’re turned down by one lender that you can’t get a loan. You may have to apply to several lenders before you’ll get an offer,” Young says.
2. Get your most recent credit score
It’s one thing to suspect you have bad credit, and another to know exactly how bad it is. Credit scoring company FICO issues five categories of credit score:
- poor: 300-579
- fair: 580-669
- good: 670-739
- very good: 740-799
- excellent: 800-850
It’s always a good idea to have a sense of your credit status before you apply for any loan. Companies like Credit Karma issue a close approximation of your score for free, and there’s no limit on how many times you can check it.
You don’t need to have excellent credit to get a loan, but as your score creeps down through “very good” and “good” into “fair” and “poor,” you’ll see a change in the rates and offers lenders are willing to give you — if they’re willing to give you a loan at all.
Priyanka Prakash, lending and credit expert with Fundera, says online lenders (more on that below) will work with individuals who have as low as a 550 FICO score.
3. Calculate your debt-to-income ratio
Some lenders will also calculate a potential borrower’s debt-to-income ratio — how much of that person’s monthly income goes toward debt — to help decide whether to issue a loan.
You can find your debt-to-income ratio through a simple calculation: Divide all monthly debt payments by gross monthly income and you have a ratio, or percentage (once you move the decimal point two places to the right).
“Lenders prefer a debt-to-income ratio of 35% or lower, meaning no more than 35% of your income should go towards paying back debt — this includes the loan you’re applying for and existing loans,” says Prakash.
4. Consider a credit union
Credit unions are a great option for those looking to get a loan with bad credit. They are more flexible and they cap out their interest rates at 18%, says Nathalie Noisette, founder of CreditConversion.
According to Experian, not-for-profit status means credit unions are exempt from paying taxes and may be willing to accept riskier borrowers than banks would, and they can charge lower interest rates and fees than banks. Experian also says that poor credit may not be a deal breaker at a credit union, as a credit union considers the applicant’s entire financial application and history.
5. Consider a secured loan
Since consumers with bad credit are seen as a default risk, secured loans are issued with a caveat — collateral, says Noisette. “If a consumer is willing to put a house, car, watch, or just about anything up against the amount of the loan, they will be able to qualify more easily,” she says.
Mortgages, home equity loans, and auto loans are considered secured loans, since you’re putting up collateral. However, a secured credit card may also be considered a secured loan.
Remember that if you take out a secured loan using your home, your car, or something else as collateral, you run the risk of losing that collateral should you become unable to pay your loans — in plain language, if you agree to offer your car as collateral and become unable to pay the money you owe, the lender could seize your car.
Most any lender that offers unsecured loans, including banks and credit unions, will also offer secured loans.
6. Consider a home equity loan
If you have home that has equity, consider using the equity. That money is available can be used, without leaning on a poor credit history.
“Your credit score will not be factored into the decision to use a home equity loan,” says Noisette. “As long as there is equity, you can use it to your advantage.”
Home equity loans have a fixed interest rate and fixed repayment term, Holly Johnson reports for Business Insider. “You can borrow money for up to 30 years,” writes Johnson, “and the interest may be tax deductible if you itemize on your taxes and use the money to make substantial improvements to your home.”
However, she writes, bear in mind that there are some downsides to a home equity loan: primarily, that you’re putting your home up as collateral, so you could lose your home if you fail to repay. Plus, some home equity loans do have fees, and you need considerable home equity to qualify. If you do decide to pursue a home equity loan as an option, make sure to do your research and compare multiple offers from lenders.
7. Search online lenders
If you have bad credit, you can still get a loan by searching beyond your bank.
Prakash says online lenders will work with individuals who have as low as a 550 FICO score. Personal loan lenders include SoFi, Payoff, and Lending Club. Sites like Credible, Fundera, and LendingTree allow borrowers to compare offers from multiple lenders side by side.
Banks face more regulations, so “as a result, they have the strictest lending standards, so if you fall below a certain credit bracket, you’re out of luck,” says Prakash. “Online lenders are a lot more flexible. They place less importance on credit and more importance on your ability to pay back a loan. That means income is paramount.”
If the borrower can show you have sufficient income from your job or your business or assets to draw on to pay back your loan, then you can get approved even with a bad credit score.
8. Bring on a cosigner
If you’re able to bring in a cosigner who adds enough strength to your application to get approved, it could make the difference between buying a home now and waiting until you can rebuild your credit.
“Cosigners give lenders peace of mind, because they provide lenders with an extra layer of security if the primary borrower becomes unable to make the payments,” says Josh Goodwin, mortgage loan expert with Goodwin Mortgage Group. “In this event, the cosigner must take over payments until the primary borrower gets back on his or her feet. That said, if the primary borrower defaults, the lender can pursue remedies from the cosigner, even if they also end up unable to pay.”
If you’re considering bringing on a cosigner, make sure that person understands that they’re liable for your loan payments should you be unable to pay.
9. Consider getting your credit report to better understand your score
Going forward, you’ll want to try and increase your credit score to make it easier to get a loan next time, or perhaps to refinance the ones you have. The first step in increasing your credit score is to understand it, and the way to do that is by getting your credit report.
Your credit report spells out everything being counted in your credit — every loan, every credit card, every debt. You’ll want to take a look to make sure everything is correct — it’s not uncommon, nor unfixable, for there to be mistakes — and to see where you might be able to make a big difference fast, like paying off an old utility bill that went into collections without your knowledge. (It happens!)
You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies, Experian, Equifax and TransUnion. Order it online from annualcreditreport.com, or call 1-877-322-8228.
10. Try and boost your credit score
Your credit score is calculated, approximately, with the following five factors:
- payment history (35%)
- current debt balances (30%)
- length of credit history (15%)
- new credit (10%)
- credit mix (10%)
Some of those factors are difficult to change, like the length of your credit history.
But others can make a big impact in a relatively short time.
“The biggest factor in your credit score is your on-time payment history, so you should start by making sure that is perfect going forward,” writes Eric Rosenberg for Business Insider. “The easiest way to ensure you never miss a payment due date is to turn on automatic billing and payments using your bank’s bill pay or your credit card billing website.”
Note that improving your credit is a marathon, not a sprint. If you’re taking steps in the right direction, you’ll see it pay off — and the next time you want to apply for a loan, you’ll be in a better position.
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Car Subscription Australia: How to Choose a Car Subscription Service
In uncertain times, you might think differently about things. For example, instead of buying and owning a car, there’s a chance you could have recently searched ‘car subscription Australia’, only to be confused at what is out there in the car subscription service space.
That’s understandable – car subscription is a new idea, a new way of thinking about essentially paying to borrow a car long term and being able to swap cars if your circumstances change. Or, if you don’t need a car anymore, to simply return it without having to worry about the fuss of selling the vehicle.
So what is car subscription? How does it work? What type of person would it suit? How long has it existed? Who invented it? These questions will be addressed in this article, where we take a look at the pros and cons of car subscription, and – perhaps importantly for those out there who aren’t quite sure it’s the right solution for them – we’ll look at car subscription vs buying and car subscription vs lease.
What is car subscription?
If you’ve ever paid to watch a movie using your Apple TV or Google Chromecast, this concept will be easy to understand: you pay to borrow the movie instead of buying a DVD from a shop and keeping it at home as a possession, while only watching it every now and then – if that.
With car subscription you simply pay to use a car for a period of time. And the price you pay to subscribe includes all the costs you don’t want to have to deal with when you own a car – servicing, insurance, roadside assistance, registration and depreciation.
Car subscription allows users to subscribe to a car to use – and typically, the best plans offer monthly vehicle use periods, allowing you to either keep the car you have, or return it if you don’t need it. Or, if you need to swap from a city-friendly hatchback to a seven-seat SUV, some subscription services allow you to do that, often at an extra cost.
Are car subscriptions available in all locations? Sadly, not yet. The idea is pretty new to Australia, with a number of services launching in recent years. They include Carly, Carbar, Hello Cars and Blinker (which lots of people think is actually called Blinkers!), and you can find them online or in the app store.
Depending on your location, you might have access to one, some, or all of these services. Simply search ‘car subscription’ plus the name of your city, be it Sydney, Melbourne, Brisbane, Perth or somewhere else, or just type in ‘car subscription near me.’ A lot of these services are in their infancy, so you might not have access to one depending on where you live. Keep that in mind.
Globally, car subscription has been around a while longer. The first service was apparently established in Hawaii about a decade ago. It’s come a long way since then, with luxury car brands now getting in on the action: Volvo has its own plan called Care by Volvo, and that will be launched in Australia in 2021. While in Europe, Jaguar Land Rover has recently launched Pivotal, a subscription service that could allow you to switch between an electric car for urban duties, or an off-roader for adventure times.
Who does car subscription suit?
Essentially, if you’ve thought to yourself: ‘I’d love to be able to drive rather than take public transport,’ then car subscription could be for you.
Further to that notion, it could suit just about anyone who thinks they need a car at some point in their lives. You might be the sort of person who only uses a car occasionally, travelling to friends’ places or back home to the country.
Or you work as a contractor and need to get to an office over a three-month period. Or you’ve got a family SUV and just want something smaller for your grown children to use because they keep stealing your wheels.
Pros and cons of car subscription
The pros are pretty clear: you don’t have to pay a huge lump sum for a depreciating asset, and the costs of ownership are all taken care of. That’s the biggest advantage.
Other ticks for car subscription include the fact you can change cars if your needs or requirements shift. You can also cancel your plan if you don’t need a car anymore. And while you don’t ‘own’ the car you subscribe to, you don’t have to share it with anyone else – which could be a reason you’d choose a subscription service over a car share service like GoGet.
There are a few cons, though. The subscription service mightn’t have the car you want or need at a specific time. You mightn’t be able to access a service at all, based on your location. The costs can be quite high, so you need to make sure you’re actually getting your money’s worth. And there can be rules around letting other people drive the car, too.
Car subscription vs buying & lease – how do they compare?
If you’ve ever bought a car outright, you know you need a wad of cash to get the car in your driveway. That’s not going to suit everyone’s budget.
Likewise, if you’ve financed or leased a car, you need to know you’re going to have guaranteed income to be able to cover the payments for the period of the lease or car loan. Miss payments, and your car could be repossessed, leading to a bad credit rating.
But with car subscription, there’s no huge buy-in cost, and you can get out at any time. That’s part of its appeal – some providers offer no deposit subscription, and there are even some that have a no credit check policy prior to approval. That could be heaven-sent if you’ve got a chequered history with past payments.
Then there are other elements to consider when weighing up a subscription vs buying or a subscription vs lease. Only a car subscription allows you to change cars easily, and some subscription services also offer delivery and collection of your car when you sign up or finish with it.
Plus, if you happen to be in an accident, you’ve got a guaranteed loan car from most subscription providers.
How much does a car subscription cost? What types of cars are available to subscribe to?
That depends on the provider, the terms and conditions, and the type of car you need. Bigger vehicles or more luxurious models will cost you more to subscribe, as they cost more to buy.
To give you an idea, Carbar offers something like a 2016 Kia Cerato sedan for $139 a week. Think you want an SUV instead? Consider a 2019 Mitsubishi ASX or 2018 Subaru Forester for $189 a week. Want seven seats? You could get a 2018 model Toyota Kluger for $229 a week. Got posh tastes (or just want to impress someone?) Maybe a 2019 Jaguar F-Pace could be your go, but it’ll set you back $429 per week.
Just for balance, you might want to check out what Carly has on offer. You could get a 2015 Holden Barina for $133 a week or do your bit for the environment and get a hybrid Hyundai Ioniq 2019 model for $287 per week.
Or maybe you want to subscribe to a car to allow you to drive for Uber or Ola – check the terms and conditions of your subscription contract before just assuming that’s okay! – and a 2018 Toyota Camry for $336/week could be perfect for you.
The above prices are indicative and may not be correct at the time you’re looking for a car, and that’s the thing: prices vary between providers, and so will the stock available to you.
So, you might be desperate for a seven-seat SUV for an upcoming family trip – but you can’t get one. That’s a pretty sizeable downside.
Plus, most subscription services don’t offer you a brand-new car. If you’re after that new car feel and smell, you might not get it – there are near-new models on most of subscription site listings but expect to pay more for a newer car than you would one that’s older.
How many different car subscription services/companies are there in Australia?
There are several reputable subscription providers out there for you to shop between – provided the service is offered in your area. The ones we’ve already mentioned include Carbar, Carly and Hello Cars.
Blinker works a bit differently – you can visit a dealership and see what stock is available, then choose a car and pay as you drive. Other options include Motopool and Popcar.
The subscription plans vary by provider: some require you to pay a joining fee, others don’t; some will deliver and collect your car, others won’t; some offer short-term cancellation, others require up to 30 days’ notice.
You really need to make sure you’re getting the right car and the right subscription plan for you, so make sure you do your research.
Not sure you want to commit to a car subscription? You could try a car sharing service first. Take a look at GoGet, or Car Next Door – both of which are run differently to the ‘regular’ subscription services.
How do you choose the best car subscription service to suit your needs?
First off, consider your location. Search ‘car subscription near me’ or ‘car subscription’ and the name of your town or city to see if you can access a car subscription network. That’s a crucial step.
If you’ve got plenty of options available to you – if you live in Sydney, Melbourne or Brisbane/Gold Coast, this could be you – then it’s simply a matter of seeing what’s available to you. But again, be sure to read the terms and conditions to see what you are – or more importantly, are not – allowed to do with the car while it’s in your possession.
77 hospitals that received $5M to $10M in PPP loans
Hospitals with fewer than 500 employees and medical offices were among the top recipients of Paycheck Protection Program loans from the federal government, according to data released July 6 by the Small Business Administration.
The data only includes companies that received loans of more than $150,000. The White House said that more than 86 percent of the loans were for less than $150,000, so the data reveals just a snapshot of the companies that received funding, according to The New York Times.
The disclosure comes after lawmakers pressed the White House to be more transparent about the loans, established as part of the $2 trillion Coronavirus Aid, Relief Economic Security Act.
The data puts the funding into ranges, with the top amount being $5 million to $10 million and the lower end of the range being $150,000 to $350,000.
Here is a list of the hospitals receiving $5 million to $10 million, by state.
Note: Some states didn’t have hospitals receiving $5 million to $10 million.
South Peninsula Hospital (Homer)
Mount Graham Regional Medical Center (Saffer)
Bakersfield Heart Hospital
Barlow Respiratory Hospital (Los Angeles)
Central Valley Specialty Hospital (Modesto)
Mammoth Hospital Southern Mono Healthcare District (Mammoth Lakes)
Aspen Valley Hospital
Southwest Health System (Cortez)
Spanish Peaks Regional Health Center (Walsenberg)
Wayne Memorial Hospital (Jesup)
Kauai Veterans Memorial Hospital (Waimea)
Kona Community Hospital (Kealakekua)
Buena Vista Regional Medical Center (Storm Lake)
Delaware County Memorial Hospital (Manchester)
Greater Regional Medical Center (Creston)
Mahaska County Hospital (Oskaloosa)
Montgomery County Memorial Hospital(Red Oak)
Bonner General Health and Hospital (Sandpoint)
Crawford Memorial Hospital (Robinson)
Jackson Park Hospital (Chicago)
McDonough District Hospital (Macomb, Ill.)
Roseland Community Hospital (Chicago)
Touchette Regional Hospital (Centreville)
Decatur County Memorial Hospital (Greensburg)
Kansas Medical Center (Andover)
Newman Regional Health (Emporia)
Labette County Medical Center (Parsons)
Harrison Memorial Hospital (Cynthiana)
Abbeville General Hospital
Mount Desert Island Hospital (Bar Harbor)
Dickinson County Healthcare System (Iron Mountain)
Kalkaska Memorial Health
North Ottawa Community Hospital (Grand Haven)
Scheurer Hospital (Pigeon)
Three Rivers Health
Aitkin Community Hospital
Community Memorial Hospital (Cloquet)
LifeCare Medical Center (Roseau)
Tri County Hospital (Carlton)
Welia Health (Mora)
Cass Regional Medical Center (Harrisonville)
John Fitzgibbon Memorial Hospital (Marshall)
Perry County Memorial Hospital (Perryville)
St. Alexius Hospital (St. Louis)
Community Hospital of Anaconda
Sidney Health Center
Kearney Regional Medical Center
Nebraska Orthopedic Hospital (Omaha)
Androscoggin Valley Hospital (Berlin)
Huggins Hospital (Wolfeboro)
Speare Memorial Hospital (Plymouth)
Artesia General Hospital
Gila Regional Medical Center (Silver City)
Nor-Lea Hospital District (Lovington)
Carthage Area Hospital
Chenango Memorial Hospital (Norwich)
Eastern Niagara Hospital (Lockport)
Erie County Medical Center (Buffalo)
The Bellevue Hospital
Van Wert Health
McBride Orthopedic Hospital (Oklahoma City)
Lake District Hospital (Lakeview)
North Bend Medical Center (Bandon)
Santiam Hospital (Stayton)
North Philadelphia Health System
The Fulton County Medical Center (Mcconnellsburg)
Sana Healthcare-Carrollton Regional Medical Center
Copley Hospital (Morristown)
Grays Harbor Community Hospital (Aberdeen)
Prosser Memorial Health
Black River Memorial Hospital (Black River Falls)
Crossing Rivers Health (Prairie Du Chein)
Reedsburg Area Medical Center
The Richland Hospital (Richland Center)
Tomah Memorial Hospital
Pleasant Valley Hospital (Pleasant Point)
Powell Valley Healthcare
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