Personal Loans For Bad Credit
If you require a loan but have bad credit it may seem impossible to get ahold of one. There are a few options available to you though. These include building your credit score, getting a personal loan from a credit union, finding a co-signer, borrowing from family and friends, or getting a secured loan.
Assuming that you do not need money immediately, it would be a good idea to build your credit score before applying for a loan. What is considered 'good' and 'bad' in a credit score varies depending on who you ask but generally 650 and below is considered to be 'bad'. If you have the time it can be quite easy to increase your credit score. One effective method is to use a single credit card for everyday purchases such as gas. Once you use your card be sure to pay off the expenses immediately. If you do this enough you can increase your credit score drastically.
If you are in an emergency situation and you do not have time to build your credit, there are still other options available to you. While many banks will not issue you a loan if you have a bad credit score, credit unions are usually more flexible and able to work with you. Credit unions may be able to look past your score and look at external factors. If you have a stable job and have lived in a house for a long time this would show that you can be dependable. Not only are their applications more lenient but their interest rates also tend to be lower. This makes credit unions a great option.
Another option is to find a co-signer. If you have a bad credit score perhaps you can find someone with a good credit score to co-sign. The cosigner’s score can help loaners overlook your score. This makes getting personal loans from banks and other loaners much easier. Keep in mind that not all loaners will accept co-signers, but this is still a very viable option.
Perhaps you are close to someone that you could borrow money from. Taking personal loans from family and friends generally means lower interest rates and chances are they won't look at your credit score. Because it is more personal than business, they will judge you based on your character and trustworthiness. Your application is your relationship.
If you don't have other options and you need an emergency loan, one sure bet is to get a secured loan. Secured personal loans are loans in which you offer collateral if you cannot pay the loan back. Collateral is something like a car or house that will be possessed by the loaner in the case that you are unable to pay back your loan. Needless to say, it is very important that you make sure you can pay back this type of loan before you apply for one.
So now you know a few ways to combat your credit score to get a personal loan. As stated before, a poor credit score does not put you out of the running. Many companies will still be willing to work with you as long as you can find a way to prove to them that they will get their money back. Do not be afraid to put out your applications and get what you need. Whatever you do, make sure that it is the best deal for you.