How Easy Is It to Get a Loan With Bad Credit?

Monday, April 6, 2015, 5:00 PM | Leave Comment

Your credit score can determine much about your financial future, but too often people fail to take measures to improve their credit, while at the same time doing that which might result in your credit score getting even worse.

That’s all aside from the fact that whatever your credit score may be, we all need some help from time to time.

Even for those with good credit, getting a loan can be a bit of a chore. How much more so, then, for those whose credit is found continually wanting?

Convincing those at bigger banks who would disburse funds to you might take more effort than it is worth, but is that the only recourse you have?

  • How Much You Want Matters

    The mistake many people make is in assuming that when they need money, only a loan consisting of a large amount of money will do.

    The wiser course is to seek out those who will give out small loans to those with bad credit.

    If you want small loans bad credit won’t necessarily stop you. In fact, by taking out small loans, and then repaying them on time, you are taking the basic steps necessary to re-establish good credit.

    How easy or difficult is it to get such a loan with bad credit? That depends on where you go seeking said loans, and whether or not you own any property and have any equity in it.

  • Your Property, Your Money

    You might find it easier to get a loan by tapping into your home equity. The danger exists in that if you can’t repay the debt you incur, you could lose your home.

    However, if you have a steady job that pays, and you hold yourself to a budget schedule, you could rebuild your credit with something you already have a stake in.

    By proving you can repay the debt you incurred by using your home to establish a line of credit, if need be you will eventually be able to apply for bigger loans, so long as you show the ability and willingness to pay off your debt.

  • >Withdraw From the Bank of Those Closest to You

    If that’s not an option, you could always go to your friends or family members. This brings with it a certain amount of risk, too, since if you borrow money from friends or family and don’t pay them back, you could lose that friend and alienate yourself from your family members.

    That being said, if you get a small loan from a friend or family member, and repay them on time, you may establish the trust necessary that would give them the confidence to act as a co-signer or guarantor the next time you go to a financial institution seeking a bigger loan.

Whether from a bank, a small loan provider, or a family member or friend, establishing the trust necessary for them to take that risk on you is a key first step.

If you can prove yourself trustworthy, you can get a small loan even with bad credit from institutions designed to help people such as you.

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