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When you have bad credit, it’s often difficult to get a loan. If you wan too purchase a home or vehicle, start your own business or begin a whole other venture, it can be a challenge to borrow money if your credit score is low. However, there are definite ways you can go about getting a loan with bad credit. Here are a few tips for getting your loan, regardless of your credit reputation.

Join a Credit Union

Credit unions are owned by their members, which means you are responsible for lower fees when you get a loan from one. Check with your employer or look into a credit union associated with your community. These will often overlook bad credit and give you a loan based on other things, such as your promise to pay it back. Credit unions also typically search for lenders and are much more likely to provide loans to individuals within their community. When you join a credit union, you are establishing a relationship with it, so if you open a savings or checking account with it, you are doing exactly that. This only benefits you.

Borrow from Family or Friends

One of the best options you have for getting a loan when you have bad credit is to turn to family members or friends. If you have a very close relationship with someone, they might be more willing to lend you money. Likewise, if you have loaned money to a close friend or family member in the past, they may also be more likely to give you a loan. However, you should keep in mind that you must tread lightly when borrowing from those closest to you because it can adversely affect your relationship. If you do get a loan this way, be sure to put everything in writing. Document exactly when the loan should be paid back and how it should be paid back, such as in specific increments over a certain amount of time. It’s important to note that when you borrow from family or friends, your credit score will be unaffected and you can have difficulty getting a loan from a bank in the future.

Use Your Home Equity

If you have equity in your home, you can use it toward securing a loan or home equity line of credit. Home equity is usually cheaper than other types of credit because it is backed by collateral. Interest on it may also be tax deductible.

Peer to Peer Lending

Another route for getting a loan with bad credit is peer to peer lending. It allows you to borrow directly from people instead of institutions. There are website available for just this situation that allow you to post that you are looking to borrow money and how you plan on using it. This is considered a good option for individuals with bad credit.

Personal Lenders

Personal loan lending is relatively new and allows people with low credit scores to receive loans. Lenders typically work with bad credit borrowers online and provide loans for things like consolidation of credit card debt and home renovations. However, it should be noted that personal loans are not the best for financial stability because some borrowers are unable to make regular monthly payments in full and on time.

Secured Loan

With a secured loan, you borrow money against an asset you own, such as your home or vehicle. The lender holds that asset as collateral and the amount you get as a loan depends on the amount of equity in the asset. Interest is also lower on a secured loan. However, you must be careful when going this route because if you default on the loan, you can lose the asset. This is devastating, especially if that asset is your home.

Pay Down Your Debt

Your debt has a considerable impact on your ability to be approved for a loan. With that in mind, if you are able to pay down debt, you will increase your chances of securing a loan. It will bring down your debt to income ratio. Don’t avoid using your credit card altogether, but spend less when using it.

These are all helpful ways you can get a loan, even if your credit is poor. Consider the terms on each of these and determine which option is the best for you.