How to get a Loan With Bad Credit?

How to get a Loan With Bad Credit?
  • Opening Intro -

    If you have bad credit, it might be hard for you to get a loan approved from bank or a money lender.

    This is because poor credit is an indication of the fact that you have defaulted payments on past and thus any bank will not be ready to risk their money.

    However, there are certain ways you can increase the chances of loan approval even with bad credit.

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However, there are certain ways you can increase the chances of loan approval even with bad credit. This post summarizes the different methods to get a loan even with bad credit.

Appeal a Co-Signer with Good credit Score

If you do not have a good credit score, you can take the help of friend or relative with good credit score. All he needs to do is to co-sign the loan papers. The banks will generally accept such loan requests as it is backed by a person with good financial condition. If you fail to repay the loan, the bank can recover the loan from the co-signer. Again, if he also fails to repay, it will affect his credit rating too. At such, you should tell him the whole situation with all the details before getting the loan sanctioned. There is no point in affecting your personal relation by hiding the details. Thus do not try to make fool of your friend or relative just to get the loan approved.

Peer to Peer loan

Peer to Peer is a platform that connects borrowers and lenders. It is a win-win situation for both the parties as the borrowers get the loan at less interest rate. On the other hand, there is a chance for investors to get good return on the money invested. If you want to borrow money from the Peer to Peer loan platform, all you have to do is to put a listing on the website with all the details. Thereafter, the lenders interested in the listing will contact you. It is obvious that these lenders will also see your credit score but they are not that strict like banks.

Take loan from Credit Unions

Credit union is a group of members that are generally working with each other. A credit union provides loan to people and charge some interest. The profit from every deal is passed on the members of the union after deducting the other charges. It is a good idea to compare the interest rates of different credit unions before choosing one. You have better chances of getting the loan approved even with bad credit from the credit unions.

Take a loan from Family and friends

If you are not able to get loan using any of the above mentioned methods, the best option is to get a loan from friends or family. The biggest advantage of this approach is that they are not going to check your credit history or financial condition. But you must remember that even if you take loan from them, you owe them the loan amount. Not paying the loan on time can not only spoil your relationship with the person but can also cause legal issues.

Money Management reference:

repairing your credit

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Last update on 2019-06-29 / Affiliate links / Images from Amazon Product Advertising API

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Categories: Loans