Bad Credit Loans in California: Your Guide to Borrowing with Poor Credit

Having bad credit can make it difficult to get approved for a loan, but it’s not impossible – even in California. If your credit score is below 580, which is considered poor or bad credit, don’t worry. There are still options available for bad credit loans in California.

In this guide, we’ll cover:

What bad credit loans are and how they work
Types of bad credit loans available in California
Pros and cons of bad credit loans
Tips for getting approved for a bad credit loan in California
Alternatives to bad credit loans

What Are Bad Credit Loans?

Bad credit loans are loans designed for borrowers with poor credit scores, typically below 580 on the FICO scale. Because borrowers with bad credit are considered higher risk, these loans often come with higher interest rates and fees.

Some common types of bad credit loans include:

Personal loans – Unsecured installment loans that can be used for a variety of purposes, like debt consolidation or emergency expenses.
Payday loans – Short-term, high-interest loans that must be repaid by your next paycheck.
Title loans – Secured loans that use your vehicle’s title as collateral.
Pawnshop loans – Secured loans that use valuable items like jewelry or electronics as collateral.

The loan amounts, repayment terms, and interest rates can vary widely between these different types of bad credit loans.

Types of Bad Credit Loans Available in California

In California, the most common options for bad credit loans are:

Personal Loans

Many online lenders and some banks/credit unions offer personal loans for borrowers with bad credit. While rates will be higher, personal loans are a safer option than payday or title loans. You can get a 3-5 year term to repay the loan in fixed monthly installments.

Payday Loans

Payday loans are legal in California but highly regulated. State law caps the fees at 15% of the loan amount, with a maximum loan of $300. While easier to qualify for, payday loans come with very high APRs and short repayment periods, usually 2-4 weeks.

Auto Title Loans

If you own your car outright, you can potentially get an auto title loan using your vehicle’s title as collateral. However, these loans also have very high-interest rates and short terms. If you miss payments, the lender can repossess your car.

Comparing Bad Credit Loan Rates and Terms in California

Here’s a quick comparison of typical interest rates and loan terms for different types of bad credit loans available in California:

Loan Type	Typical APR	Loan Amount	Repayment Term
Personal Loan	20-36%	$1,000 – $50,000	2-5 years
Payday Loan	460% (15% of $300)	$300 max	2-4 weeks
Auto Title Loan	200% – 300%	Up to $5,000	1 month – 1 year

As you can see, payday and auto title loans have exorbitantly high interest rates compared to personal loans. They can quickly become unaffordable debt traps.

Pros and Cons of Bad Credit Loans in California

Pros:

You can get approved with poor credit
Personal loans offer fixed rates and repayment terms
Some lenders may accept non-traditional credit data

Cons:

Higher interest rates and fees
Payday/title loans have very short repayment periods
Risk of losing collateral with title loans
Predatory lenders often target bad credit borrowers

Tips for Getting a Bad Credit Loan in California

If you need to get a bad credit loan in California, follow these tips:

Check Your Credit Report – Get copies of your credit reports and dispute any errors before applying for a loan. Errors can negatively impact your credit score.
Shop Around for Lenders – Interest rates can vary significantly between lenders, so compare rates from at least 3-5 lenders. Check for lenders that use non-traditional credit data or accept co-signers.
Consider Getting a Co-signer – Having a co-signer with good credit can improve your chances of approval and may qualify you for a lower interest rate.
Avoid Payday & Auto Title Loans if Possible – These loans should be an absolute last resort due to their extremely high costs.
Read the Fine Print – Make sure you understand all the fees, rates, and terms before accepting a bad credit loan offer.

Alternatives to Bad Credit Loans in California

If you can’t get approved for a reasonable bad credit loan, or want to avoid the high costs, consider these alternatives:

Get a Co-signer – As mentioned, adding a co-signer can help you qualify for a better loan.
Borrow from Friends/Family – While awkward, this can be an affordable short-term solution if you have access to funds from loved ones.
Look Into Credit Counseling – Non-profit credit counseling agencies may be able to negotiate lower interest rates with your creditors or set up a debt management plan.
Work on Improving Your Credit Score – Making payments on time and reducing credit card balances over time can improve your creditworthiness.

Final Thoughts on Bad Credit Loans in California

While bad credit loans can provide fast access to cash when you need it most, they come with significant downsides like high costs and risky terms. Always exhaust other borrowing options first, like getting a co-signer or working with a credit counselor.

If you must take out a bad credit loan in California, avoid payday and auto title loans at all costs. Stick with reputable personal loan lenders that provide fixed rates and reasonable repayment terms.

Above all, have a solid plan for repaying the loan on time. Making late payments will only worsen your credit situation. With some budgeting and discipline, a personal loan can be used to improve your credit score over time.