5 Ways to Get a Loan Even With Bad Credit

by Jeff M. Writer

No one likes to be judged. However, when it comes to loans, the story changes. Lenders will have to look into your credit score to determine whether to lend you the money or not, and based on whatever they find, they will judge you. So if you have a bad credit score, just have it at the back of your mind that you are most likely to be shown the door than given the money.

However, it’s hard, but not impossible to get a loan – even with your less-than-stellar credit score. Here is how to go about it:

1. Know your credit score

The term “bad credit” has different meanings to different lenders. Just because one lender turned you away because of your credit score doesn’t mean you won’t get the loan with another lender.

Learn to shop around, go to various lenders and be sure your credit score is indeed a deal breaker before you conclude.

2. Peer-to-peer lenders

Another good option is the Peer-to-Peer-lending. Instead of going through lots of paper work, rigid rules and high overhead costs, you can just borrow from strangers online who might be sympathetic to your plights and are willing to help, but are definitely not looking to lose their money.

3. Credit unions

You have a better chance of getting loans from credit unions because they tend to be smaller than large banks and are more attentive due to their small circle. A credit union can look past your credit score and focus on your personality. Moreover, it’s easier to understand a man’s needs when he is sitting across a desk in front of you instead of through a bunch of paper work and a large crowd.

4. Friends and family

Friends and family are always there through thick and thin; getting a loan from them should not be any different. They won’t judge you based on your bad credit history – that’s even if they care at all – and would lend you the money needed without the excessive protocols that come with money lending through some other institutions.

However, just because they are friends and family and are willing to take a chance only because they know you doesn’t mean the loan process should not be properly documented.

The documentation of the loan terms should be done on paper and you can consider involving a third party just so everyone is protected.

5. Collateral

If your credit score is on an all-time low and you can’t get anyone to lend you money, put up collateral. Pledge something that’s very valuable to you, this way your lender knows you’re actually serious about getting the loan and that if you default in any way, they have something to fall back on.

However, be careful pledging collateral – do it wisely. If you put up your home as collateral for the loan, make no mistake thinking you won’t be booted out if you default on the payment plan. Apply wisdom.

Finally, looking for loans with a bad credit score can make you desperate, opening you up to con artists and lenders who might just want to take advantage of your situation – knowing you have been boxed to a corner and would take anything available.

Avoid paying upfront fees before getting the loan, let it be deducted from the loan proceeds.