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How to Get Personal Loans for Bad Credit With a Cosigner or Co-Applicant

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One of the most common obstacles to getting a personal loan is credit requirements. If you have a weak credit score, you may struggle to get approved. Fortunately, there’s a workaround — you might be able to get personal loans for bad credit with the help of a cosigner or co-applicant.

Before you enlist a cosigner’s help, make sure to answer these important questions:

4 questions to ask before getting personal loans with a cosigner or co-applicant

Is it easier to get a loan with a cosigner or co-applicant?

In short, yes. When you apply for personal loans with a cosigner or co-applicant, you have a second person helping you meet the loan criteria and credit requirements. Here’s what you need to consider if you plan to apply with another borrower.

1. Does the personal loan accept a cosigner or co-applicant?

If you’re looking to use another borrower as your ticket to personal loans for bad credit, you’ll need to find lenders that allow cosigners or co-applicants.

The option to add a cosigner or co-applicant isn’t as common for personal loans as it is for other products, such as private student loans. So make sure to check the lender’s policy online or via customer service before applying.

2. Can your cosigner or co-applicant qualify for this personal loan?

You’ll need to make sure you’re getting a cosigner or co-applicant who can qualify for a personal loan.

After confirming the lender does offer personal loans with a co-applicant or cosigner, you’ll want to check out its credit requirements. Some lenders list personal loan requirements, such as a minimum credit score or minimum annual income, on their site. Usually, a good credit score to get personal loans will be at least in the mid-600s.

Your cosigner or co-applicant also can try to get a rate quote with a soft credit check, which won’t ding their credit. The lender will tell your co-borrower whether they can qualify for the personal loan and what personal loan rates the lender is likely to extend.

3. Is your cosigner or co-applicant fully aware of their responsibilities?

It affects both your credit scores. The loan will show up on your credit report as well as your cosigner’s or co-applicant’s. So any missed payments or delinquencies will damage both your credit scores. Your co-borrower must repay the debt if you don’t. If you’re unable to repay this debt for any reason, your cosigner or co-applicant would be responsible for paying back the funds. Talk through these possibilities to make sure you both understand what sharing this debt will look like.

4. Does this personal loan’s features fit your needs?

Lastly, check the terms of the personal loan to make sure it will fit your needs. Some key features to look for include:

Personal loans in the amount you need to borrow, whether that’s $1,000 or $100,000. Personal loan terms that match your goals, whether that’s getting the most affordable monthly payments or paying off the debt as fast as possible. Use our

to see how different loan amounts, rates and lengths affect your repayment.

and interest rates. Some personal lenders charge origination fees, and they’ll offer different rates. Compare advertised costs as well as your customized rate quotes to find the right deal for you.

Personal loans that offer a co-borrower option

To get your search started, look for lenders that allow you to apply with a cosigner.

Finding personal loans at LendingTree

We recommend starting your search with LendingTree, a loan marketplace that allows you to compare multiple offers at once. With dozens of lenders on its platform, LendingTree may be able to connect you with a lender that allows cosigners.

What’s more, the process typically only involves a soft inquiry on your credit, meaning your score won’t be impacted by checking for personal loan offers. Shopping around is an important part of the borrowing process, since it lets you find the lowest rates and most flexible terms.

Note that Student Loan Hero is a subsidiary of LendingTree.

Seeking personal loans at LendingClub

With flexible underwriting criteria and features, LendingClub is another smart place to find personal loans for bad credit.

LendingClub is a peer-to-peer lending platform that facilitates loans funded by real people.

“LendingClub offers certain applicants the option to apply for a loan together,” said Alia Dudum, director of communications for LendingClub. The option to apply jointly for a LendingClub personal loan makes this product even more accessible for borrowers.

“To qualify for a joint application loan, a number of factors of either or both applicants are considered, including but not limited to information provided on the joint application, information provided by credit bureaus, credit score(s), income, debt-to-income (DTI) ratio, credit history length and recent credit history,” said Dudum.

A qualified co-applicant can strengthen your LendingClub personal loan application and increase your chances of getting your loan approved.

Here are some additional details on LendingClub personal loans:

Fixed APRs 10.68% – 35.89% Origination fee of 2.00% – 6.00%, charged upon disbursement No prepayment penalties or application fees Personal loan amounts of $1,000 to $40,000 LendingClub personal loan terms of 36 or 60years Rate quotes with a soft-credit check

If you need personal loans for bad credit, it might be because you mishandled debt repayment in the past. So while it’s easier to get a loan with a cosigner, that doesn’t automatically mean it’s a good idea.

Make sure you limit your personal loan amount to what you need and can afford to borrow. Lastly, discuss a plan to responsibly repay the personal loan with your cosigner or co-applicant to avoid any mishaps.

Information contained on this page is provided by an independent third-party content provider. Frankly and this Site make no warranties or representations in connection therewith. If you are affiliated with this page and would like it removed please contact [email protected]

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Bad Credit

3 credit habits that you need to break

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(© Rido – stock.adobe.com)

Are you using your credit card responsibly? Or do you have a few bad habits? Take a look at three common bad habits that people have with their credit cards and the best ways to stop doing them.

Habit 1: Pushing the limits

The first bad credit habit is pushing your outstanding balance close to its limit. What’s wrong with that? The first problem is that you’re giving yourself a larger debt load to contend with every month — one that accumulates interest the longer that it sits. It could be very difficult to pay down, and it could even lead to you maxing out your card.

The second problem with this habit is that it leaves you vulnerable to emergencies. You’ve taken up the majority of your available credit, so you can’t depend on it for unexpected payments. What if you need to pay for an urgent repair and there’s not enough room on your card? What can you do?

To avoid that difficult situation, you could apply for an online loan to help you cover the emergency costs and move forward. See how you can apply for an online loan in Ohio when you have no other safety nets to fall back on. It’s important that you only turn to this solution when you’re dealing with an emergency. It’s not for everyday purchases or small budgeting mistakes.

In the meantime, you should try your best to keep your credit utilization at 30% or lower — this means that your balance should be below the halfway point of your limit.

Habit 2: Paying the minimum

You pay your credit card bills on time, but you only give the minimum payment. While this habit can stop you from racking up late fees and penalties, it can still get you into hot water if you’re not careful.

Only paying the minimum for your bill will make it very difficult for you to whittle down the balance, especially when you’re continuing to charge expenses on your card. You’re only taking $20-$25 off a growing pile.

So, what can you do? If you’re paying this amount by choice, stop it — you’re only making things harder for yourself down the line. If you’re paying this amount because you don’t have any more funds, look at your budget to see whether you can cut your monthly costs to get more savings and use them to tackle your balance.

Habit 3: Using it for every single expense

You don’t need to put every single expense on your credit card. Your morning coffee? Your afternoon snack? Putting these small, everyday expenses on your card is a habit that can make your balance climb quickly.

You also don’t want to put some very important expenses on there, like mortgage payments. For one, these payments are large and will take up a significant amount of your credit. Secondly, if you need to use a credit card to make these payments on time, you need to reinvestigate your budget to see whether you can actually afford your living space.

So, what you should you do? Use a debit card, cash or checks to pay for the items above. Only put expenses on your credit card that you’re positive you can pay off in a reasonable timeframe.

Don’t let these bad habits drag you down and get you into financial trouble. Break them now, before it’s too late.

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Free credit reports have been extended; here’s why it’s important to check yours regularly

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Checking your credit could save you from identity theft. (iStock)

Typically, you’d be able to check your credit report — at least for free — just once annually through each of the three major credit reporting agencies. But thanks to the coronavirus pandemic, credit reports are now more accessible than ever.

Credit reporting companies Equifax, Experian and TransUnion are all offering  free credit reports weekly through April 20, 2022.

The move means better insight into your financial health during what, for most, is an economically challenging time. According to experts, it might also be a time that’s ripe for at-risk personal information and identity theft, too — even more reason consumers should be checking their credit on the regular.

HOW OFTEN DOES YOUR CREDIT SCORE CHANGE?

Have you checked your annual credit lately? If not, here’s what you need to know about these free nationwide credit reports and how to get them. If you’re not sure where you fit on the credit score spectrum, you may want to start using a credit monitoring service to track changes to your credit score. Credible can get you set up with a free service today.

Free credit reports for all?

The nation’s three credit bureaus initially started offering free weekly credit reporting last year, just after the pandemic began. In early March, they announced they’d extended the offer for another year, this time through April 20, 2022.

To request your free credit reports and access copies, you can go to AnnualCreditReport.com and provide some basic information to verify your identity (things like your date of birth, Social Security Number, and address).

Once your report is ready, you should see a detailed list of all open and closed accounts in your name, your payment history, recent credit activity and more.

5 BENEFITS OF HAVING A GOOD CREDIT SCORE

Protect yourself from identity theft

There are many reasons why checking your credit activity is important, but chief among them? That’d be the prevalence of data breaches in today’s world — not to mention the risk of identity theft they come with.

“In the past, it was perfectly acceptable for people to check their credit history once a year, but now with security breaches happening on a regular basis, consumers should be monitoring their credit more closely than ever,” said Clint Lotz, president and founder of TrackStar.ai, a predictive credit technology firm.

Lotz said the Equifax breach — which exposed over 147 million Americans’ personal information in mid-July 2017 — is the perfect example of why watching your credit report is important as far as identity theft protection goes. The pandemic, he said, adds an extra layer of risk to things.

“It took them [Equifax] months before they even realized they had been hacked, and considering that they hold files on hundreds of millions of Americans, it’s fair to say that many identities were stolen by the time they caught up to it,” Lotz said. “With many of us worrying about very serious issues not related to our credit, it’s a prime time for that stolen data to be put to work by bad actors in slow, methodical ways and in the hopes that nobody notices it.”

More reasons to check your credit

Checking your credit health often isn’t just good for detecting fraud alerts and to protect your identity, though. You can also monitor your report for errors — things like inaccurately reported late payments, for example — and then dispute those with the credit bureau.

If the error gets corrected, it could improve your credit score and make a jump from bad credit to a FICO score that’s more favorable. Not sure of your credit score? Head to Credible to check your score without negatively impacting it.

WHAT IS CREDIT MONITORING, AND HOW DOES IT WORK?

You can also use your credit reports and scores to monitor your financial habits — like the timeliness of your payments or how much debt you have left to pay off. Both of these factors can play a big role in your score, as well as how likely you are to get approved for loans, credit cards and other items.

“If you’re taking out a loan, getting insurance or even applying for a new job, checking your credit will allow you to see an overview of what would be seen by others looking at your credit,” said Leslie Tayne, a debt relief attorney with the Tayne Law Group. “Staying up-to-date on your credit reports and information allows you to know exactly where you need to improve.”

Want to be sure your credit is stellar before applying for a loan or insurance policy? Consider Credible’s partner product Experian Boost, which lets you use positive payment history on utilities, streaming and other bills to improve your credit score.

Set up a monitoring service, too

Though checking your credit reports manually is smart, you should also consider signing up for a credit monitoring service. These consumer financial services check your credit information and score regularly and alert you of any changes.

IS IT WORTH PAYING FOR CREDIT MONITORING?

If you’re interested in monitoring your credit or improving your score, head to Credible and learn more about how Experian can help. You can also use Experian Boost to get credit for on-time bill payments.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Do Personal Loans Have Penalty APRs?

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

When you make your credit card payment late, you’re often subject to late fees and a penalty APR, which is a temporary spike in your interest rate.

The Blue Cash Preferred® Card from American Express, for instance, has a 13.99% to 23.99% variable APR, but the penalty APR is a variable 29.99% (see rates and fees). Penalty APRs usually last for at least six months, but card issuers often reserve the right to extend them — especially when you continue making late payments. A look at the terms for the Citi® Double Cash Card show us that the “penalty APR may apply indefinitely.”

Penalty APRs are certainly not a trap you want to fall into, but it’s not something you usually have to worry about if you have a personal loan. Personal loan lenders can, however, charge late fees upwards of $39 per late payment. Whether your loan charges late fees all depends on how good of a loan you qualify for, and that comes down to your credit score, borrowing history and ability to make your payments.

Personal loans also tend to charge lower interest rates than credit cards, too. The average personal loan interest rate for two-year loans is currently 9.46% according to Q1 2021 data from the Federal Reserve, compared to 15.91% for credit cards.

Typically, interest rates for personal loans range between roughly 2.49% and 24%, but personal loans for applicants with bad credit can come with even higher APR — so do your research before applying.

Other common personal loan fees include:

  1. Interest: The monthly charge you pay to borrow money
  2. Origination fee: A one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs
  3. Late fee: A one-time fee charged for each payment that you fail to make by the due date or within your grace period
  4. Early payoff penalty: A fee incurred when you pay off your balance faster than planned (because the lender misses out on months of expected interest payments)

As you can see, personal loans can be costly, even without a penalty APR. It’s obviously best to avoid paying extra fees whenever possible. That’s easier to do when you have a good to excellent credit score, since you’ll qualify for better loan options.

Select has a free tool to help match you with personal loan offers without damaging your credit score.

None of the loans on our best personal loan list charge origination fees or early payoff penalties, but some may charge late fees.

Our top picks for best personal loans

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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