How to secure a personal loan when you have bad credit
If you have ever been in a situation where you have an emergency bill to pay but no cash to pay, you would know that usually, the only way to deal with that situation is by getting financial assistance. Getting financial assistance nowadays is not something to be ashamed of. In reality, almost every American has taken some sort of loan to cover an expense. You may look at people with nice jobs and good monthly income and think that these people do not know what financial trouble is. Truth is that most of these people have been in the same uncomfortable situation. In today’s economy, having a job with steady monthly income is not enough to prepare you for emergency expenses.
Maybe those with big enough safety funds can handle such problems. But let’s be realistic. Most people can barely make their monthly payments, and putting some money aside for a safety fund is not even on the table. So when you are confronted by an unexpected financial problem, what do you do? If you are reading this, then you may very well know what an emergency expense may be. It can be a medical bill or a home repair, or you may need to pay for a new vehicle or fix your old one. The list goes on. Whatever your financial trouble is, one thing is for sure – the sooner you deal with it, the better.
Getting financial help
When a person is in need of immediate financial help, the options are not that many. However, they are still more than one. And while for decades, the main source of financial assistance has been the banks, today, the conventional loan lending institution is not your only option. Getting a standard loan from a traditional loan lender is always going to be a viable option for some. However, the truth is that nowadays, not many can actually qualify for such loan. In order to be approved for a personal loan from a bank, you would need to have a perfect credit score, something that many people cannot say that they have. The good news is, that traditional loan lending institutions that require stellar credit score are not the only options that borrowers have. Today, even people with bad credit scores can find help by taking out a bad credit unsecured personal loan.
Bad Credit Personal Loan
We live in a world where people with poor credit scores are not completely left out, as many loan lenders offer no credit check personal loans to their customers even if their credit scores are far from perfect. In order to qualify for a personal loan with bad credit score, you would, of course, still have to meet some requirements. Probably the most important thing when you apply for a bad credit personal loan is your income. If you have a job and have steady monthly, your chances of qualifying for a poor credit personal loan are going to be quite high. Since bad credit loan lending companies take a certain risk when giving out loans to people with bad credits, they need to make sure that the person has the ability to repay that money with all the fees and interest rate on time.
When talking about interest rates and fees, personal loans with bad credit, of course, have higher interest rates compared to standard personal loans from banks. Even though this is actually quite normal, you should keep in mind that if you do not feel confident in your ability to repay the loan on time, taking out that loan may be a very, very bad idea. Even if your income suggests that you can qualify for a personal loan with bad credit, you are the one, who best know your budget and all the other bills that you need to take care of. Therefore, you will have the best judgment on whether you would be able to manage to repay that loan or not.
Choosing the right loan lender
There is numerous loan lending companies that offer small personal loans with bad credit. You need to find the ones that offer the best terms that fit your specific financial situation and needs. You can find many loan lenders online and compare what they are offering. This is really important so do not just go with the first loan lender that you find. Choosing the best loan lending company can be crucial, so do yourself a favor and do research. Keep in mind that the terms of a bad credit personal loan may be different depending on the state that you live in.
Each state in the US has its own law regulations that loan lending companies must obey. To find out about the personal loan law regulations of your state, then compare what different companies have to offer. Once you have picked a loan lending company to work with, go ahead and start the application process.
Personal loans alternatives
Taking out a loan from a credit union
Credit unions are non-profit organizations that provide their members with loans that are cheaper compared to what private loan lending companies normally offer. In case you have a bad credit score, your credit union will most likely be far more willing to grant you a loan than your bank.
Get financial assistance from your friends or family
Borrowing money from those who are close to you can be very tricky. On one hand, you may be able to get cash with no interest or fees to worry about, enabling you to take care of your emergency expense straight away. On the other hand, by borrowing money from a friend or a family member, you will be putting your relationship with that person in danger. Since in most cases, when people borrow money from their friends or their relatives, there is no actual contract being signed.
Normally it is just a verbal understanding between the two sides. So if you do not pay back the money on time, it may not be a big problem at first, but as time passes, the more awkward it is going to get. Eventually, you can end up ruining your relationship with the person from whom you borrowed money from. So you better consider the outcomes as you can never be too sure whether you will be able to repay the money on time or not.