How to get a Personal Loan with Bad Credit: Loan Shopping 101
Nearly everybody finds themselves in need of extra cash at one point or another. Emergency cash loans are big business. They are available without most of the hassle and red-tape that banks put you through. If you have bad credit, however, you may think you need to visit some back-alley loan shop that is only a glorified loan shark. This isn’t the case.
There are reputable loan shops that will give you fast cash loans with bad credit. What is important to know is where to find these places and how to go about getting what you need. This is best done by researching through a third party who isn’t in the business of actually giving loans. This way, you can get help finding a lender who offers a personal loan with bad credit in an unbiased way and doesn’t serve some personal interest. That is where we come in.
We are here to help you understand the personal emergency loan process and how to get a personal loan with bad credit. Once you finish your visit with us, you will feel armed and ready to embark on the next step of your plan, which is finding a lender who may be able to help you get a personal loan with bad credit. Let’s get started.
What is Considered Bad Credit for a Personal Loan?
The credit score you have on record can range from 0-850. For most circumstances, a credit score of around 650-700 is considered fair and under 650 is considered bad. Any score in the pooror fair category is considered a high-risk for most lenders when it comes to loans, but that does not mean you can’t find a place that is willing to take that risk.
Having a low credit can easily come about when you have made late payments to any place, including utility companies. This can make it difficult to find an apartment, get credit, get a large loan for something like a car or home. However, three things are often available to those with low credit scores to help them get through difficult times and start to rebuild their score. These three things are small personal loans, secured credit cards, and short-term loans. So, let’s check out how to get a personal loan with bad credit.
Can I Get a Small Personal Loan with Bad Credit?
Yes, you can get a small personal loan with bad credit but you are not likely to be able to do so by walking into your neighborhood bank or credit union and simply filling out an application. This is not how to get a personal loan with bad credit. In the majority of cases, unless you have someone who is willing to co-sign with you, a regular bank will deny your application. Especially if your score is in the lowest category.
Some credit unions do have more lenient lending policies, however, and will be willing to work with you. You may need to shop around for a bit and you can expect to pay a higher interest than what you would pay if your credit score was higher. However, getting approved for a short-term loan, especially a small personal one, can be done.
Another option is to consider personal loan shopping online for a lender. This is one of the easiest ways regarding how to get a personal loan with bad credit. That is where doing your research is extremely important. Some of these lenders charge such a high-interest rate that you will find yourself hard-pressed to repay the loan on time. This will end up hurting your credit score further. Take time to do your research and look for the best one possible.
Researching a Small Personal Loan with Bad Credit
When doing your research, you will want to consider several things before making a decision. First, ask about the annual percentage rate. This is the amount of interest you will be charged. Look for the lowest rate possible. The next thing you need to know is the amount of time you will be given to repay the entire loan, including interest. This can vary from one place to another. Another factor that has to be considered is the amount of each payment you must make. This will be based mainly on the amount of the loan and the time period you are given to repay it. You will want to make sure that you can easily make your monthly payments without getting yourself into greater financial hardship.
Remember, every payment you can make on time will help increase your credit score in the end. That is the fourth thing you should ask about. Not all places will automatically report your payments. Look for a place that will. Finally, check out the upper and lower limits on the amount you are allowed to borrow. There is no sense in working with a place that requires you to borrow at least a thousand dollars if all you need is five hundred. You don’t want to burden yourself any more than is absolutely necessary.
Should You Take Out a Personal Loan if You Have Bad Credit?
This is a question that is best answered by you. You are the one who knows your situation the best. In some cases, the money you need isn’t an option. You may be facing a doctor or veterinarian bill, losing your home because of a missed mortgage payment. This includes any other situation that require you to have cash now. It is not always possible to find a friend or family member who can lend you the money you desperately need. Basically, a small personal loan is your only solution to a looming financial problem. Here is how to get a personal loan with bad credit and still come out ahead.
If you are attempting to get your credit score to a more acceptable level, then a personal loan may also be helpful. You will need to keep certain things in mind, however. You will need to make sure you are not late on even one of your payments. It will also help if you can actually make more than the minimum payment each month. The sooner you get this loan paid off, the better it reflects on your credit report. It can also be helpful if you have several smaller accounts that need to be paid off. Getting a personal loan to consolidate those payments will allow you to get them off your credit report sooner. It might even helping increase your score.
How to Get a Personal Loan With Bad Credit
The best chance you have of getting a personal loan with bad credit is to start before you actually need the money. The first step to follow in the how to get a personal loan with bad credit process is go to a reputable place that will help you improve your chances of getting a personal loan by evaluating different options. As mentioned earlier, this should be a place that does not directly lend money to people. Indeed it can then be unbiased in its decision. Make sure you already know your credit score so that you have a place to start.
Once you have completed your research, you will have a greater idea of what your chances are of obtaining a loan with your current credit score. You will be able to see what options are available, what places will give you the best terms, and what kind of repayment plan you would be looking at. All this information puts you a few steps ahead in the process. Once you have your options in front of you, then you can order them from best to least desirable. Then start applying.
Which Loan Company is Best for Bad Credit and Should I Consider an Online Lender?
Determining which loan company is best for your particular needs regarding a bad credit loan can take some time to figure out. That is why it is often best to work with one of the loan shopping sites previously mentioned. They are skilled in knowing how to get a personal loan with bad credit. They will have a comprehensive list of what is available. This is something you may not have all the resources to find. This can cause you to overlook a source that may be perfect for you. Once you know what your credit score is and how much money you are looking to borrow, you need to try to figure out what kind of payments you would be able to comfortably make. This will help narrow down the initial list.
Online loan companies are not at all like they used to be. Back when the Internet was new, often these loan companies were shady businesses that were more like loan sharks than someone to help. Today, regulations have made these type of lenders less prevalent. When working with a loan shopping site, you will be able to find many online lenders. Those are more quickly ready to work with you than local banks, especially if you live in an area with limited options.
Another advantage of using an online lender is the time factor.A local bank or credit union may take days or weeks to make a decision. An online lender, as for him, can have you applying in the morning and having the money that evening. In an emergency situation, if you are approved, this is perfect.
How to Improve My Chances of Getting a Personal Loan with Bad Credit
The best time to improve your chances of getting a personal loan is before you need it. You should find out your credit score now and start to do what you can to improve it. This entails starting to pay off the current debt you already have. Make payment arrangements when possible and keep up the agreement. If you have a credit card, keep it only for emergencies. Having an open credit line looks good if you don’t owe much on it so try to pay off as much of the credit card as possible. Don’t over borrow. Figure out how much you actually need and only ask for that amount. The less you borrow, the greater the chance of getting approved. That’s one of the biggest secrets to how to get a personal loan with bad credit.
Cons of Getting a Personal Loan for Bad Credit
There are many pros of a personal loan for bad credit, but there are also some cons. Interest rates will definitely be higher than if you had a good credit score. The length of time you have to repay the loan will also be shorter. Keep in mind that you will be more limited in the amount you are able to borrow. When considering a personal loan with bad credit, make sure you are in a situation where you will end up improving your score in the end.
So, there you have your answer to how to get a personal loan with bad credit. A bad credit score is not something that will totally eliminate your chances of getting a personal loan. In fact, once you have paid that loan back, you will see your credit score improving somewhat. Indeed, every time you make payments on time to the lender, they will report this to the credit companies. One of the easiest types of loans you can get when your score is low is a small personal loan. Don’t allow panic to make you overlook this fact. In time, you can work on getting your credit score up but that takes time. As you work toward that goal, know that facing a personal financial emergency does have a solution.
Doing your research before the need arises is your best chance of finding the best place to approach as waiting until the stress of the situation is upon you can have you acting in haste. This can lead to an unwise decision. Research now and you will be prepared to get the best possible personal loan for you.
Joyce A has written nearly 4,000 articles on a multitude of subjects with a focus on personal finance. She is a published book author, has answered questions at AllExperts.com and has ghostwritten articles for over 25 years. She uses her Forensic Psychology degree to aid in writing for many fields. Joyce received a 4-year Bachelor of Science degree from Kaplan University, graduating magna cum laude with a GPA of 3.98/4.0. The dedication and hard work she put into this accomplishment can be seen in the way she handles her writing.
Ethan founded OfferEDGE in Dec 2013 with the mission to unify the financial quadrants through a system that allows businesses to be seen when consumers use a Single Sign On across Lending, Credit, Money and Real Estate. Taub invents the offers and IP, while overseeing all aspects of the company. He also has orchestrated the company’s earned media across the brands Loanry®, Cashry®, Debtry®, Budgetry®, Billry®, Taxry® and more. This includes over 500 publications that have been featured across the web.