You may think that having a low credit score means that getting a loan is off the table, but there’s good news. It is possible to score loans for bad credit!
30 percent of Americans have subprime credit, so if your credit score is below 660 you have company. There are several ways that anyone with bad credit can secure a loan.
You’ll want to do the research and understand the terms of a loan – and what the penalties are for not repaying. Keep reading to learn more about where you should look and what you should avoid with bad credit loans!
Explore Options Beyond the Bank
Banks may be unwilling to do business with you, but there are tons of other lenders willing to look past a low credit score.
Credit unions may be more willing to give you a loan than a traditional bank. Credit unions are very community-oriented and provide a more personal connection. If you’re invested in your community as a leader or volunteer, this can turn the tide in your favor even if you have bad credit.
Interest rates on credit union loans cannot exceed 18 percent, making this option one of the better ones. Check out the credit unions in your area and make a chart to compare offers. You may be able to apply online, too, which can speed up the process.
Seek the Help Of Family and Friends
Asking for help can mean hitting up mom and dad for a loan. If your relationship is strong and they trust you to repay the money, this strategy can work. But it can feel desperate asking to borrow money from family when you’re an adult.
There is another way to ask a family member for help with a loan, however.
You can ask someone you trust to be a cosigner. A cosigner is a friend or family member whose good credit score and stable income can help you secure a better loan with a lower interest rate. Lenders are more likely to trust you if you go in on a loan with someone who has the financial backing to make payments on the loan.
If your cosigner has a solid income, that can only help your case – then the lender knows they’ll get their money back. Another bonus of enlisting a cosigner is that your loan’s interest rate may be lower in the long-run. That could save you thousands of dollars over time!
Asking someone to be a cosigner may seem like it is asking a lot, but it can show that you are eager to build your credit and move forward in life.
Check Online Lenders For Loans For Bad Credit
If you’re trying to get a loan as quickly as possible, searching online is the fastest route. Most lenders have websites where you can access the terms of the loans and send in an inquiry within minutes. You’ll save on gas money, long lines, and paperwork you don’t want to deal with.
Bricks and mortar places take longer, and sometimes you don’t have that kind of time. You’d be surprised what shows up when you do a search for bad credit lenders online.
Make a Chart To Compare Options
When you start searching for lenders online or visit places in person, it’s easy to become overwhelmed by the number of possibilities. Don’t let all of your hard work go to waste. Keep a notebook or digital file where you jot down important info in easy-to-read charts or lists.
Keep track of things like the interest rates, repayment time tables, loan amounts, credit score requirements, and other small details. Pay the most attention to the interest rates since they will affect your monthly payment plan. A chart or table lets you compare the stats and make an informed decision on the best loan for you.
Even better, if you gather data from a number of different lenders, they might start competing for you! That’s right, even if you think getting a loan with bad credit is impossible, there could be a bidding war for your business.
Get That Credit Score Up
Since getting loans for bad credit is within reach, you can put more energy into improving your credit score. Getting a loan that works for your budget can also help your credit score if you repay it on time.
Don’t let a poor credit score deflate you – with a little persistence, you can get it higher so future loans will be easier to find (and have better interest rates)! A few tricks can set you on the right course.
Set up payment reminders on your phone or enroll in automatic payments online. This will ensure that no more late payments ding your score. You can even try paying bills bi-monthly rather than once a month to help your score.
Review your credit report. You can get a free copy of it and see where you need to make improvements – or contest anything that you think is incorrect. Consolidate things like student loan debt to help build a higher score and make repayments simpler.
And if your budget allows, try to expand your arsenal of payments. Adding things like mortgage or rental payments, auto financing, and credit card payments to your routine can expand what factors into your credit score.
What To Do Next
Nudging that credit score higher is the best longterm solution. But in the meantime, there are ways to secure loans for bad credit. When you’re doing the research, make sure to write down the critical info that will determine your loan and repayment amounts – and ask questions!
If you’re ready to get started on financing your dreams, it’s easy. Contact us or fill out our simple forms online to get things moving!