It’s easy to let your credit rating slip. In fact, more than half of Americans have had their credit request denied. This may be because of poor financial decisions or circumstances beyond your control.
Whatever the reason for your low credit score, getting a loan with bad credit may be more difficult, but it is possible.
Keep reading to learn about the best loans for bad credit.
- Loan Aggregators
Loan aggregators are companies that buy debt from all kinds of credit levels and put them together. This allows them to serve people with poor credit since it is piled in together with loans from people with better scores.
These companies don’t lend you the money directly but help you find lower rates by combining these loans with others. If you have poor credit, check into these types of options.
- Peer To Peer Lenders
Peer to peer lending is a great way to get a loan with having great credit. Peer to peer sites match up lenders looking to make some interest with individuals looking to secure loans. There’s no bank or collateral involved.
Like most loans that are possible even with bad credit, the interest rates are high (over 30%). Unfortunately, that is the price of doing business with a low credit score.
This type of loan can be used for any purpose. For more information on peer to peer, lenders read on here.
- Secured Loans
A secured loan is one that is backed up by collateral. Peer to peer loans don’t require collateral, which is great if you don’t have any. But if you do have some collateral to offer (such as a car or home) that may get you a better loan.
It’s safer to lend you money if the lender can rely on taking possession of your car if you don’t pay! Of course, you don’t want that to happen, and it won’t if you pay back the money on time. The good thing about this strategy is the interest will be much lower.
- A Local Credit Union
Credit unions sometimes offer credit to local people with lower credit scores. They offer more personalized service and may rely on other factors besides your credit score to approve your loan. Perhaps you have a good reputation in town, for example.
- Payday Loans
This should be a last resort only. Payday loans are great to get you out of pinch once and a while. But you should only do this if you really need the money, and you have a way to pay it back soon.
They offer loans to anyone, regardless of bad credit, and since the interest is so high, they make a lot of money from people with little money to spare. But, they do offer short-terms loans to people with very bad credit. Use caution.
Best Loans For Bad Credit
The first four options are the best loans for bad credit you can find. The last option is only for an extreme situation.
It isn’t impossible to get a loan with bad credit, you should need to look around a bit more for options to do it!
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