How You Can Get A Loan With Bad Credit

It’s possible to get a loan even if you have bad credit, it’s just a bit more difficult. There are fewer available options and the loans can be a bit more expensive in terms of interest rates. That said, it’s a rare thing when borrowing even with bad credit, is impossible. Here’s a quick look at some of those options and how to get them.

Online Lenders

Yes, you can go to brick and mortar lending institutions, but the online ones are worth checking into. This is one of the better routes to take when looking bad credit loan options. Online loans are continuously evolving. These lenders aren’t banks and as such, they tend to have a different view of risk and use more creative methods for evaluating your creditworthiness. Because of this, they might be more willing to approve people who have less than stellar credit scores.

Credit Unions

When you need a loan before you can improve your credit score, make sure that you take a look at credit unions. They might be more willing to work with those who have poor credit. Credit Unions tend to be smaller than banks and are more community focused. Because of this, they might personally review your application and have a conversation with you about it instead of just taking a look at the credit score and saying no.

Family and Friends

Most of the peer to peer lending sites will allow you to borrow money from strangers. However, if you have truly bad credit, family and friends might just be your only choice. They already know you and might be willing to give you the money you need. However, if you do decide to borrow money from family or friends, do it in such a way that everyone’s protected. Write out the terms of the loan and consider having a third-party process all of the payments.

Even if your family and friends won’t lend you the money you need, they might still be willing to help. If their credit is good, they might decide to co-sign for a loan for you. Doing this puts them at risk though and this can jeopardize your relationship with them.


If you come to find that you’re having issues being approved for a loan, you might need to put up some sort of collateral. This is when you pledge something of value so that the lender knows that you’re serious about paying them back. Additionally, it gives the lender a bit of security because they have a better chance of getting their money back even if they have to take the collateral and sell it if you don’t repay.

Be cautious when you pledge collateral. If you have built up equity in your home, you might be able to borrow against that equity, but that comes with significant risks. If you aren’t able to make the payments, you might have your home foreclosed on.

As you can see, with bad credit loans, you still may be eligible. Make sure to weigh all of your options and choose the one that will suit your needs.