Sometimes life just throws everything at us. You get a divorce; your car breaks down, everything happens at once. One thing leads to another, and you miss a payment, then another. Next thing you know, your credit score takes a hit. You did not plan for this, it just happened. Now you need a loan, but how can you possibly get one with bad credit? Here are a few options to consider.
Get A Co-signer
Ask a trusted friend or family member with good credit to co-sign the loan. That trust must go both ways because if you miss your payments, your co-signer will be held responsible and it will affect his or her credit score as well as yours. Make sure you can make your payments on time!
Online Personal Loan
Online personal loan providers do not take into account your credit score. They verify that you have a steady job and the means to repay the loan. The payments are then spread out on a period of three to four months. The downside to online personal loans is that they have high interest rates, but if you use it as a one-time solution to bail yourself out, it might come in handy.
Family and Friends
Borrowing from family and friends is never easy, but it can be of great help when in a tight jam. Prepare yourself beforehand. Make a budget to show that you are serious about your finances. Sit down with your friend or family member and explain your situation to them. Be honest and tell them precisely what bills you will pay with the loan. Suggest a payment plan to them and see if it suits them. Offer to pay interest. Although they might refuse, it shows your appreciation. Put everything in writing. It will prevent misunderstandings and falling outs. Moreover, last but not least, stick to your repayment plan. Not paying your debt to friends or family will put a damper on your relationship.
A secured loan is not as strict with credit scores as an unsecured loan, the reason being you provide collateral as insurance. The collateral can be your house or your car, or any other property that has enough value. The collateral lowers the risk for the lender so they will be more willing to lend you money even with a bad credit score. You will also pay a lower interest rate, which means that you could clear other higher interest debts with this loan. If you make your payments on time, you will improve your credit score which will give you better opportunities in the future. The risk for you is that if you do not repay the loan as agreed, the lender will be able to seize your collateral. It is only a last resort, but the risk is still there. So make sure you can manage the payments.
When all is said and done, it is possible to manage for a time even with bad credit. The thing to do is not to stay down, but to get yourself back on track and work towards improving that credit score.