Bad Credit Loan Options

Getting a loan from a bank when you have bad credit can be next to impossible. Luckily, there are several other options you can consider when looking for a loan. So if your budget is tight, and your credit score low, read on to find some alternative loan options that will fit your needs.

  1. Borrow From Others - This one can be tricky, but for different reasons than the others. Borrowing money from friends or family can be a great way to get instant cash without interest, but you run the risk of damaging the relationship with that person. If you are in a jam, your friends and family will likely be willing to help you out, but only if they trust you. Be sure to pay back any money you borrow as quick as you can to avoid hurting your relationship.
  2. Credit Card Cash Advances - These are not advisable, but they are at least cheaper than payday loans. A credit card cash advance should really only be used if you are have an urgent payment to make, not because you want to buy yourself a new TV. This option is usually available to anyone with a credit card, but you should probably look at your other options first before deciding on this one.
  3. Guarantor Loans -  This type of loan requires you to find someone who is willing to cosign your loan. This person must have a good credit score, and be willing to be responsible for you paying back your loan. This is another loan that runs the risk of damaging a relationship, but if you know you can pay it back, it should not be a problem. The cosigner can not be financially linked to you in any way, and should also be at least 21 years old and a home owner.
  4. Logbook Loan - A logbook loan is perfect for anyone who needs cash quickly, and owns a car. Using your car as collateral, you can secure a loan in just a few hours. The best part about logbook loans are that you get to continue driving your vehicle while the loan is out, which will probably help you get back and forth to work each day. The only risk with logbook loans is if you fail to pay your loan back on schedule, you may lose your collateral. Most agencies will work with you though to minimize this risk.
  5. Pawnshop Loan - If you have something valuable you own, you can use it as collateral to get a loan from a pawnshop. They offer fast cash, and competitive interest rates. If you fail to repay the loan though, your item is considered sold and you will have to purchase it back (usually at a higher cost and assuming no one else buys it).
  6. Payday Loan - These loans have high interest rates, but are a good option if you only plan on having the loan out for a couple of days. Payday loans are designed to be paid back on the borrower's next payday. No credit checks or collateral are needed, only proof of income. If you just need some money to get you through the week, you might want to consider a payday loan.
  7. Peer to Peer Lending - Lastly, you can consider peer to peer lending. This is done online, and allows you to borrow from a stranger rather than a bank. Credit checks are still performed, but because you are borrowing from a person and not a company, your chances might be better at securing a loan, regardless of your credit score.

Hopefully one of these options is right for you. Each one comes with its own positives and negatives, and it is up to you to decide which one is right for your personal circumstances. Best of luck!

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