Do bad credit loans exists? Many people struggle with the need to find a loan while having bad credit.
If you've found yourself in that same predicament, then you might feel as if there are no other options out there for you. After all, people stress the importance of having good credit to receive the loans they need.
Fear not! There are still ways that you can apply and fund the loan that you need even with a bad credit score.
Here is the best way to get a bad credit loan. Be sure to consider this process and how it fits into your plans.
1. Lookup Your Credit Report
In order to go through this process and come out successful on the other side, you need to know what you're working with.
Because of that, you need to use a free credit report to find your current credit score and information on the different loans you've received.
In fact, there might be some loans or credit card charges that you could quickly pay off and raise your credit score. Every little bit helps!
Reviewing your credit score, as painful as it might be at first, can help you get an idea for what the lender will see. You'll also need the score to search for loans that will accept it.
2. Try to Improve Your Credit Score Immediately
As previously mentioned, there might be a few opportunities for you to improve your credit score almost instantaneously.
While you can't re-do the mistakes that you've made in the past, you can start the trend towards correcting those errors. In this case, you'll be targeting any credit amounts that you can pay off and raise your score.
One of the most helpful ways to do that is through the snowball method. This repayment method focuses on gradually paying off smaller loans to reduce the total amount of loans you're working with.
Place a certain amount towards paying off each loan you're currently in debt to, but place a bit more on the loan with the smallest amount. In time, you'll have paid that loan off, then you can start placing money on whichever loan was the second-smallest.
3. Shop Around for Options
You might be surprised to find out that, even with bad credit, you'll still have a few options to choose from.
Granted, whatever loan you receive will have a higher interest rate in order to weigh out the “risk” of offering it to you. But that high-interest rate won't play much of a factor if you pay it off on time (or sooner).
Here are a few of the options that you can choose to shop around. Remember, the worst that they can say is “no”. Take the time to gather a few offers and give yourself as many options as possible.
Bad Credit Loans
This is hands-down the best way to get a loan with bad credit. It allows you the opportunity to receive the amount that you need with trusted companies that specialize in high-risk clients such as yourself.
In fact, finding a bad credit loan lender can give you access to an easy application process, multiple income sources to pay off the loan you receive, and quick turnaround time.
They can also give you 24/7 accessibility, same-day funding for your loan, and outstanding customer service if you were to apply online.
Don't ever take the solicited approval ratings that banks advertise as truth. There are a plethora of exceptions to that rating that they (conveniently) fail to mention.
That said, you may yet find a bank loan with terms and conditions that you're willing to jump all over.
Better yet, you no longer have to walk into the bank to receive different offers from banks. You can simply go to their website to get an idea of what you'd be looking at.
Be sure to list out several different quotes that you receive so you can filter out options as you go along.
Credit Union Loans
What's the difference between banks and credit unions? Credit unions are a nonprofit institution.
In other words, because they're not in the business of making a profit, they tend to have your needs above their agenda.
Be sure to research the best credit unions to receive loans from and reach out to a few to get some quotes. If nothing else, you might find that they'll be more transparent about the loans they can offer you than banks.
4. Get Ready to Apply
Different loan providers require different necessities to successfully apply for a loan with their establishment.
Some may not require much at all. Still, you should have all proper documentation and information accessible in case it's required.
Be sure to have your social security number, proof of annual income (such as a pay stub), driver's license, personal contact info, and your current debt amount.
Try to be as transparent as possible about the situation you're in. You want to find a lender that will work with your situation, so be sure to communicate that up front.
Best Way to Get Bad Credit Loans: Do Your Homework
While it might take a bit longer than those with good credit, the best way to get a bad credit loan is by being diligent and broadening your search.
Try to remember that the company or service you're receiving the loan from is just as important as receiving the amount that you need.
Be sure to browse our website for more articles on loans, as well as many other helpful financial topics!
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. Now that Brian is debt-free, his mission is to help his three children prepare for their financial lives and educate others to achieved financial success. He blogs at Debt Discipline.