How to get Personal Loans with Bad Credit

Need a personal loan? No problem. But, you have less-than-perfect credit. Now, you might have a problem. Not many lenders are willing to help borrowers with poor credit. Though there exist specialist lenders for people with bad credit you will likely have problems with interest rates and/or loan terms.

What is bad credit? Well, the meaning may be different for different lenders, but anything less than a FICO score of 620 is enough to raise the eyebrows of a lender. Needless to say, the more your credit score, the more is your chance of obtaining a personal loan.


Despite difficulty, it is possible to obtain personal loans with bad credit. But you need to research well and take into your account your ability to pay back the borrowed amount and possibly a very high interest later. Follow the six steps mentioned here and you might be able to get a quick fund.

  1. Visit your Bank: The first step would obviously be to check with your bank or lender. Depending upon your relationship with the bank, you might be offered assistance for your urgent cash needs. If you have a savings account or CD, then it will become easy for the bank to lend you against the same at a low interest rate. Alternatively, you may also be asked to put something of value as collateral, making your loan a secured one.
  2. Search Online: In recent years, online banking platforms have grown to leave behind the traditional banks when it comes to origination of personal loans, mortgages and other kinds of loans online. You are likely to find something that you can trust while searching online. Peer-to-peer lending (or person to person loans) has become a good alternative to people searching for personal loans online.
  3. Find a Credit Union: The best thing about a credit union is that it understands you like no other lenders. Credit Unions are for-no-profit organizations. So, they are likely to hear you more sympathetically than a bank or private lender. Locate a credit union in your neighborhood that you can join and seek its membership. You will never need to turn to any other lender in future.
  4. Seek the Help of Family or Friends: You may not like the idea of asking a close friend of family directly for the money you need. However, there can’t be anything better if you do so as you will be able to save on high interest rates and fees associated with a bad credit personal loan. Another way to ask for their assistance is to persuade them to become a co-signer and help you qualify for a loan. Remember a co-signer must have a good credit score and shares equal responsibility towards the repayment of the loan.
  5. Check with a Bad credit lender: Everything else failed, now you can turn to a specialist lender as a last resort. There can be several lenders in your region that claim to offer bad credit loans in quick and hassle-free manners. However, you need to do a good research before seeking help from any of these lenders. Compare for the best interest rates and the most convenient loan terms.
  6. Try an Alternative: There are alternatives beyond a bad credit personal loan. Some of these alternatives include home equity line of credit, cash advances, payday loans, title loans or government approved secured loans. Lenders are more likely to offer cash if you are willing to offer collateral. Such kinds of loans are good alternatives, but you are advised to turn to credit card cash advances only in emergency, and avoid payday loans altogether. Payday loans are illegal in many US states.

A Bonus Step
Wait until your Credit Improves: Bad credit personal loans are generally not a good financial decision. You are always at a risk to losing control of your financial matters. A much better alternative would be to take some time improving your credit score and apply for a regular personal loan later on.


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