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How to Get a Loan with Bad Credit

The loss of income, excessive medical bills, and unforeseen home and auto repairs are causing many people to need loans to help out. However, a third of Americans credit falls into having “bad credit” on the Vantage Score consumer credit score.  So if you have bad credit, all is not lost. You can get a loan with bad credit today.

Use Your Line of Credit from Your Home

If you are a homeowner, it’s not difficult to see why you could have fallen trapped into having bad credit. On the upside of things, if you have equity in your home, you can use the line of credit as a loan option for yourself.

A homeowner’s line of credit is an excellent alternative to a traditional loan as it does offer a low-interest rate and in some cases is tax-deductible. This inexpensive loan option does have a heavy penalty if you can’t afford to repay it, though. Since it’s tied to your property, it’s almost like taking a secured loan. You are putting your home at risk of being lost. So only do this if you know you can afford to make the payments.

Apply for a Peer to Peer Loan

It’s quite difficult to ask friends and family members straight out for a loan. However, you could borrow money from a total stranger who is sympathetic to your situation and is looking to make some money on the side.

Peer to Peer lending is a growing loan option for those with good and bad credit. The actual peer to peer platform would screen you, meaning your credit is checked. However, it’s not the only deciding factor.

Most peer to peer lenders consists of an online platform where individual investors pool money together, which creates enough funding for the borrower. A borrower can receive a loan in a short amount of time with low-interest rates. The investor would receive a pretty decent return. It’s truly a win-win for both sides.

Ask Someone to Co-Sign for You

As mentioned above, borrowing money from a trusted person may not be an option, however, they may be willing to co-sign a loan for you. You may have the income to back a loan but are just stuck with bad credit. So a co-signer would “vouch” that you’ll pay this loan back. They would be taking a chance if you didn’t pay the loan or were late paying it.

In the end, the co-signer is responsible for the loan. So if you do have a co-signer, ensure you are going to be able to make on-time payments for the sake of their credit and your relationship with them.  When you have bad credit a co-signer can help.  There are bad credit lenders that work exclusively with those that need them.

Take Out a Secured Loan

Finally, for those with bad credit, there are many options for taking secured loans. A secured loan means you’ll put a valuable item up as collateral. Lines of credit, title loans, and bonds are all forms of secured loans. Putting your items in a pawn shop is a secured line of credit as well. These loans offer lower rates than an unsecured loan because you are putting something valuable on the table that the lender can use to secure their funding back.

All is not lost if you are in need of a loan and have bad credit. Simply check into one of the above four options and get the money you need today.

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