How to Get Loans With Bad Credit: 9 Borrowing Options

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If you’re wondering how to get loans with bad credit, this guide has you covered. Emergencies come up. While you can’t always plan for them, unforeseen events are bound to happen. If your credit is less than perfect, there are still plenty of ways to get access to a loan.

From how to get a loan without good credit to the best loans for bad credit, think of this as your go-to loan guide. Some of the options below can even boost your credit score. Here’s everything you need to know about getting loans with bad credit.

1. Understanding the Different Types of Loans Without Good Credit

When you need a loan and you don’t have good credit, start by researching your options. There are several different types of loans that you can apply for without having a perfect credit score.

Before you apply, it can also be helpful to check your credit score. You can do so for free once a year from the Federal Trade Commission. Downloading your annual report can help you prepare for what type of loan you should get.

Checking your credit this way also doesn’t count against your score. It’s good to know where you stand credit-wise before you begin.

2. Get a Co-Borrower

If your credit isn’t perfect, a co-borrower can be a great option. If someone you are close to has great credit, you can ask them to co-sign a loan for you. You’ll be more likely to get the loan because you have the guarantee that your co-signer will pay if you can’t.

The bank is more likely to agree to a loan if they have an assurance that someone else will pay if you default on your loan. With a co-signer, you are eligible for more money and more favorable terms. Make sure you ask someone you trust and someone in good financial standing.

3. Car Title Loan

Another option when you have a low credit score is a title loan. A car title loan is an easier loan to qualify for regardless of your credit score. If you have a car that you own, all you need is the title. With your title and proof of identification, you can apply for a car title loan.

You’ll be given your loan using your car as collateral. The cash is usually distributed quickly and you’ll have a short repayment period.

4. Personal Loan

When an emergency comes up, not everyone has the extra cash to cover it. This is where a personal loan can come in handy. You can often get a personal loan with a poor credit score because lenders know you’re in a pinch. You might have a higher interest rate because of this but you should be able to qualify regardless of your score.

As long as you have a steady proof of income, most lenders can work with you on some form of personal loan. With a bad credit score you might not qualify for a huge dollar amount, however. These loans tend to be smaller.

5. Peer-to-Peer Investors

With a peer-to-peer investment, you can take a loan from individuals instead of a financial institution. This alternative means of financing can allow for some wiggle room when it comes to your credit score. The lenders are people who would like to see a better return on their investment than by traditional means.

6. Payday Loan

If you have a steady job and you can prove your proof of income, you may qualify for a payday loan. A payday loan gives you access to cash quickly regardless of your credit. To qualify for a payday loan, your income is more important than your score.

You will typically qualify for a small amount of money based on your ability to pay the loan back with your paychecks. Loans can be paid back directly from your bank account over a short window of time. These loans can be expensive if the terms are broken.

7. Save Money

If you have credit problems, the best way to access cash is to save it. The more you can save away, the less reliant you’ll be on a financial institution. Although this isn’t always possible in an emergency, even a small amount of savings can make a difference.

The more you can save the less debt you’ll incur. Less debt means a higher credit score.

8. Use a Secured Loan

There are several different types of secured loans. A HELOC or home equity line of credit means you take a loan from the equity in your home. With this type of loan, your credit isn’t a big factor because the bank has your home as collateral.

An equity loan is another example. You could lose your home if you don’t pay the loan back, however, regular on-time payments can boost your credit score.

9. Borrow From Family

If you’re having trouble qualifying for a traditional loan, borrowing from a friend or family member could be an option. With someone you know, you have plenty of flexibility. You and the borrower can come up with your own terms.

How to Get Loans With Bad Credit

Knowing how to get loans with bad credit doesn’t have to be overwhelming. From secure loans to peer-to-peer lending, there are a number of non-traditional loans to choose from.

If your score is less than perfect, these tips for how to get a loan with bad credit are key. Alternative means of financing are great options when an unforeseen expense comes up. For more money tips and resources, check out the personal finance section.