Are you struggling with your credit score but need to take out a loan? Click here to learn how to secure loans for people with bad credit.
30% of the United States has what major credit bureaus would consider to be below-average credit.
If you’re among those people, you might be thinking to yourself, “Who the heck cares what some corporation thinks about me?!”
Unfortunately, that answer to that question is landlords, life-partners, car rental services, lenders, and more.
Expanding on that last party, lenders, if you’ve tried to take out a personal loan with bad credit, you’ve probably run into rejection. That’s because lenders see too much risk in lending money to people that have proven to be less than consistent when it comes to managing their financial obligations.
The good news is that there are still ways to secure loans for people with bad credit.
We outline a few of these ways below.
1. Borrow from the People That You Know
Very few professional lenders are going to give you a cent without running your credit. That’s why it’s beneficial to turn to a non-professional lender if you have access to one.
Your parents.Your siblings.Your friends.
Depending on how credible you are to each of those parties on a personal level, if you let them know that you’re struggling financially and could use help, they may be willing to lend a hand.
We get that it can be a hardship to asked loved ones for money. The truth is though that they are among the few people that might be willing to offer you a no credit check, 0% interest loan.
2. Walk into a Pawn Shop
Pawn shops have been a go-to way to secure loans for people with bad credit for decades. All you need to qualify for this loan is an object of value (a game console, necklace, etc.).
If you’re not sure if your object is valuable, you can look it up on Amazon/eBay to get a better understanding of what it might be worth.
Pawn shops will give you an amount of cash that’s in line with what your item might be able to sell for. Once you pay back your loan, they’ll return your item.
3. Try a Car Title Loan
Most adults own a car. As a matter of fact, there are well over 250 million cars on the road domestically today.
Since cars tend to have a value that exceeds $1000, they have become an excellent way to secure loans for people with bad credit.
To use your car to get a loan, find what’s called a “car title lender” in your community. Then, bring in your car and your ownership paperwork to borrow against your car’s value.
Just be aware that if you don’t pay your loan back on time, your lender reserves the right to repossess your vehicle.
4. Consider Payday Loans
Payday loans get a bad wrap because of the volume of predatory lenders that exist in this space. Still, payday loans represent a way to get your hands on fast money, and most lenders won’t run your credit in order to facilitate your loan.
All you’ll need to score a payday loan is a job, a checking account, and an ID that proves that you’re a legal adult.
Understand your loan provider’s terms (interest rates, fees, etc.) prior to taking on a payday loan to ensure that you’re getting a deal you can live with.
5. Ask Your Bank If They Offer Secured Loans
Secured loans are loans that are backed by an object of value.
Sound familiar?
That’s because pawn shop loans and car title loans (both of which we’ve discussed) are types of secured loans.
Your bank may offer secured loan products that accept niche forms of collateral.
For example, a bank might let you borrow against the value of your home. They may also be willing to let you borrow against the value of your stock portfolio.
What banks accept as collateral will vary from lender to lender, so inquire to see what your options are.
6. Find a Co-signer
If you know somebody that’s generous enough to serve as a co-signer (guarantor) on your loan, you’ll almost certainly be able to qualify for an excellent loan.
Co-signers sign your loan application alongside you. If you default on your loan, your co-signer’s signature gives lenders legal permission to come after them for any debt that you still owe.
Given the amount of risk that presents to a co-signer, you’ll probably need to have a solid relationship with them in order to get their support.
7. Look for “Bad Credit Loans” Online
With such a large percentage of the country having below-average credit, lenders have gotten wise to the fact that they’re losing out on potential business by excommunicating those people from borrowing. What many lenders have decided to do is create loan products that are tailor-made for people with credit issues.
Consequently, “bad credit payday loans”, “bad credit short-term loans”, and more are all just a Google search away.
As with all loan products, be sure that you understand your loan’s terms before signing. Loans that are targeted at bad credit borrowers tend to be heavily stacked in a lender’s favor.
Wrapping up Our Tips to Secure Loans for People with Bad Credit
Our tips to secure loans for people with bad credit are tried and true methods that people use every year to get their hands on the money that they need.
Deduce which tips work best for you, leverage them, and make sure you always borrow with the intention of paying back your debt. If you do that, you’ll rehabilitate your credit and eventually qualify for better loan products.
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