There is no way to sugar coat it. If you have bad credit, it is more difficult to get a loan than if you have good credit. Of course, that doesn’t mean the day won’t come that you need one anyway. If you find yourself in this situation, bad credit and needing a loan, fear not. There are ways to obtain a bad credit loan.
Why it’s Harder to get a Loan with Bad Credit
Oftentimes, the reason for your bad credit might not even be your fault. Perhaps you lost your job and got behind on your bills or you had a large medical emergency that set you back. Regardless of the reason, your lower credit score is a stumbling block to you being approved because financial institutions believe you are a higher risk borrower and that there is a greater risk that you will default on your loan.
Learn How to get a Bad Credit Loan
There are several ways you can get a loan even with bad or no credit. These include the following:
1.) Talk to a Credit Union
While a credit union is similar to a regular bank, there are differences. A bank tends to be owned by a large financial institution with ridged rules and guidelines for approving loans. A credit union, on the other hand, is a non-profit organization that brings together people that have something in common such as their job type. Credit unions still have certain requirements that they will expect you to meet, but they tend to be more willing to work with someone with bad credit than a bank is.
2.) Make Your Home Equity Work for You
If you have a good deal of equity in your home, then it might be possible to get a home equity line of credit even if your credit score is less than perfect. You will need to have a stable work history to be approved, and keep in mind, that your house will be on the line, so be sure you can make the payments before you go this route.
3.) Ask Someone to Co-Sign
If you have a family member or even a friend who is willing to co-sign a loan then it will go a long way to getting a bank to approve your loan. There is some risk here because if you default on your loan, your co-signer will be responsible for making the payments, so make sure you can make the payments before you have someone else sign on the dotted line.
4.) Check Out Unsecured Personal Loans
Too often, people will turn to payday loans or car title loans to get the cash they need to deal with an emergency. While one of the attractions of these types of loans is that you can obtain one quickly, they come with extremely high-interest rates.
Instead of falling into a revolving nightmare of debt to one of these types of predatory lenders, a personal loan is the better choice, and you can obtain a personal loan quickly as well. In some cases, you can receive an approval in as little as 24 hours. Your credit history is a factor, but it isn’t as big of a consideration as the investor may be more willing to overlook a black mark on your credit history than a bank would.
5.) Borrow Money from Friends or Family
This can be a scary road to go down when getting a loan, but if you have no other options due to bad credit and need a bad credit loan, then you may have to grit your teeth and do it. Make sure you put the terms of the loan in writing and be sure you will be able to honor those terms, or you could hurt a close relationship with a family member or friend.
There is no doubt about it, if you have bad credit, you will need to jump through a few extra hoops to obtain a bad credit loan, but the good news is there are options out there for you. With a little work and perseverance, you will be able to get your loan without too much trouble.
This information was brought to you by BetterLoanChoice
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