how to get a bank loan with bad credit

how to get a bank loan with bad credit

Personal Loans For People With Bad Credit Or No Credit

Bad credit or no credit makes it tough – but not impossible – to get a loan. Credit unions, home equity and peer-to-peer loans or even debt consolidation with no loan could improve your credit rating and increase your future options.

Personal Loans For People With Bad Credit Or No Credit

You may have seen it on a sign somewhere or possibly on your TV or computer screen: “No credit, no problem!” Don’t believe it. The truth is, when you need to get a personal loan and you have no credit or bad credit, there definitely is a problem. It’s not an insurmountable one, but it is a problem nonetheless.

Having poor credit makes you a high-risk customer to major banks, credit unions and other major lending institutions. Those lenders have strict standards, and they rely on credit scores when picking their borrowers and calculating loan terms. Unless lenders are assured that their loans will be repaid, they simply won’t make the loan. In addition, heightened regulations and tighter internal controls by lenders in the wake of the Great Recession make today’s lending climate a tough one for borrowers.

So when your credit is bad, you may feel like you’re at the mercy of payday lenders and other sources of financial help, sources that will only loan you money if you agree to repay it at high, or “subprime,” interest rates. These loans are fool’s gold. They often you leave more in debt than you should be. In fact, payday loans are illegal in 13 states because of their predatory terms.

To understand how your credit affects your personal loan options, the best place to start is to understand your credit score. Free credit scores are now available at several online sites.

The National Foundation for Credit Counseling says that 60% of Americans haven’t checked their score in more than a year.

Some common signs of a bad credit score include:

  • You are paying higher interest rates than you see advertised
  • You have stopped trying to pay down debt and are satisfied making minimum payments on high interest credit cards
  • You have a history of late payments for housing, utilities or other monthly bills
  • Your checking account is overdrawn on a regular basis
  • You have problems getting a lease for housing
  • Cell phone companies won’t give you a contract

All of these have a negative effect on your credit score, making it more difficult to get a loan. Don’t get sucked into a situation that sounds too good to be true. If you have bad credit and need a loan there are options available but it will take a little time and research to find the one best suited to you.

Credit unions are similar to commercial banks in terms of their services, but they are owned by their members rather than by profit-seeking shareholders. Credit unions are nonprofit institutions, meaning they pass their earnings along to their members in the form of lower fees and borrowing costs and better customer service.

A credit union – especially one affiliated with your employer or one that is community-based – may be willing to look beyond a poor credit history and make a judgment about whether it will loan you money based on your character and your promise to repay, regardless of if you have bad credit or not. Think of them in the way you would a small community bank from years ago.

Although the recent recession forced a number of smaller credit unions around the country to merge with larger ones, almost all credit unions are actively looking for borrowers. If you can afford terms that match your credit history, you are likely to find a credit union somewhere willing to work with you.

If you are thinking of asking a credit union for a personal loan, look for one with which you have something in common. For example, if you are a veteran of the armed forces, you might want to approach the Navy Federal Credit Union. If you are a teacher, there are credit unions created by and for members of that profession.

By joining a credit union, you could position yourself for much more favorable loan terms, regardless of your credit score.

The Navy Federal Credit Union caps its personal-loan annual percentage rate (APR) for members at 18% — and that holds true even if your credit score is 600 or less.

In the same credit situation, a bad-credit borrower might receive a 36% APR from another lender.

Let’s say you have a three-year, $10,000 loan. Here is the total repayment:

The chance to save more than $3,000 makes it worth looking into enrolling in a credit union.

In Shakespeare’s “Hamlet,” the character Polonius admonishes his son Laertes to be “neither a borrower, nor a lender.” While this advice is prudent when dealing with strangers, it might be even more judicious if you’re thinking about borrowing from family members or friends. Not repaying a loan to a relative or close associate can poison relationships in ways that go far beyond a bad credit report.

Nevertheless, sometimes those closest to you are your best sources of funds and a family loan can benefit everyone involved. You should always treat any loan from someone you know just as if it were an important business transaction between you and a stranger. That means it should be formalized with clear documentation and legally recorded. To avoid future problems, create a written contract that includes the loan terms and interest rate, and what will happen if you cannot repay the debt.

If borrowing from a friend or relative is not possible, you can still approach someone with good credit who trusts your capacity to repay the loan and you can ask him or her to be a co-signer on a personal loan from a traditional lender. With a qualified co-signer, the lender will set the loan terms based on the credit score of the person with good credit, who will then be equally responsible for repayment. All payment information will be recorded on both yours and your co-signer’s credit reports, so if you default on the loan, or you’re late with payments, you will severely damage your co-signer’s credit score. However, if you make timely payments, your own score will improve, making it easier to obtain future loans without a co-signer.

If you have equity in your home, you can apply for a home equity loan or home equity line of credit (HELOC). Home equity is the difference between the amount your home can be sold for and your mortgage. Your home is used as collateral, and home equity loans can be obtained regardless of your credit score. The interest rate is usually low, because the loan is secured by the home. Also, the interest you pay on a home equity loan is usually tax-deductible.

Unlike a home equity loan, which is a lump sum of cash, a HELOC acts like any other credit account. You can access money when you need to, up to the loan’s credit limit, and you must pay it back according to a predetermined schedule. In both cases, it is important to remember that tapping your home equity puts your property in jeopardy if you don’t repay the debt. But if you are disciplined and have a reliable source of income, it is an inexpensive way to borrow from a reputable lender if you have bad credit.

One of the benefits of a home equity loan or HELOC is the extended loan term (15 or 30 years). The long term will substantially lower your payment, though you will pay more in interest over that time period.

Peer-to-peer lending, also known as person-to-person lending, is a relatively new loan form, having only been around since 2005. It’s an online platform that allows you to borrow directly from another individual rather than from an institution. Potential borrowers can post a loan listing on various peer-to-peer websites, indicating the amount wanted and what it’s for. Investors review the loan listings and choose the ones they wish to fund.

Your credit score is still a factor, but since an individual investor has much greater leeway in how it is to be weighed these loans are often more readily available for people with bad credit. Lending standards are significantly more lenient and interest rates are usually lower than those offered by traditional lenders. In addition, peer-to-peer websites help evaluate risk for the lender, while verifying the lender’s credentials for the borrower.

How to get a bank loan with bad credit

How to get a Bank Loan with Bad Credit

If you have bad credit and have tried to apply for a bank loan, you probably have discovered just how difficult it is to qualify for such a loan. All of the different financial institutions most likely give you a similar answer. They require you to come up with all sorts of financial documentation to prove you make you say what you make, and then turn you down when your credit report pops onto the screen. With so many different lenders turning you down, you may wonder how to get a bank loan with bad credit. That is exactly where Pay Power Loan comes in to help. With the help of the PayPowerLoan.com website, you’ll never again need to worry about not receiving your financial assistance when it is needed most.

How is Pay Power Loan Different?

Most banks only look at your credit score and base the decision on approving or denying your request from that number alone. At Pay Power Loan, it is understood that sometimes people don’t have perfect credit score. This should not affect you or cause you any kind of financial problems because your credit score is less than desirable. Instead, the service is here to make sure everyone is able to qualify for a loan. This is why not only does it not matter what your credit score is but you don’t need to provide all of the extensive paperwork other financial lenders ask of you. So, the next time you are ready to apply for a loan but you have bad credit and are afraid the other lenders will turn you down (or have already turned you down) all you need to do is take advantage of Pay Power Loan.

You should never worry about your credit score or if you are unable to receive the necessary financing. That is why you need to apply today for a loan through Pay Power Loan. You may have attempted to use other services in the past. Now it is time for you to take advantage of this company and use the best.

3 Loan Types — How to Get a Bank Loan with Bad Credit

Although it would certainly be nice if we could all afford to get along without credit, paying cash isn’t always a viable option. The reality of life is that most people are reliant on lines of credit to make certain purchases, including using loans to cover medical expenses, purchase a new car, or buy a home.

The first place many of us think about when considering a loan is the bank — that is, after all, where most of us keep our money. And not long ago, applying for a loan would have been a production. Potential borrowers put on their best suits and blouses, got their documents in order, and headed down to the local bank branch to have a personal interview with the bank’s representative, in whose hands the decision rested.

As traditional as going to the bank for a loan may be, your local bank can often be a good place to get a fair rate. Thankfully, getting a loan from the bank is no longer such an affair. While the exact process will vary depending on which type of loan you need, getting a loan from the bank, even with bad credit, may be easier than you think.

As its name implies, a personal loan is a line of credit extended to an individual consumer for personal use. Typically ranging from $500 to as much as $35,000, personal loans can be used for just about anything, including credit card consolidation, home repairs, or even family vacations.

A personal loan is a type of installment loan, which means the borrower will repay the loan over the course of an agreed-upon period of time in set amounts, generally through regular monthly payments. Personal loans are also unsecured loans, so borrowers are not required to supply a form of collateral to obtain a personal loan.

When applying for a personal loan with poor credit, it can be easy to convince yourself you need to take any loan offered to you, regardless of the terms. Don’t make this mistake. Even with poor credit, you could receive multiple lenders happy to have your business, so be sure to shop around when looking for a personal loan.

The best way to find and compare multiple banks and lenders may be to use an online lending network. Often containing hundreds or thousands of lending partners, online lending networks can improve the quantity — and quality — of your loan options.

When comparing loan offers, be sure to look at all aspects of the loan, not just the monthly payment. Check the interest rate and loan terms to ensure you won’t be stuck paying more interest than you should. Personal loan terms typically range from 12 months to five years, though the specific terms will vary based on the lender, the amount borrowed, and your personal situation.

One of the most confusing parts of the borrowing process tends to be a result of the personal and individual nature of lending. For example, although everyone knows having bad credit can keep you from getting a loan, most banks and lenders don’t publish hard numbers on just what, exactly, a bad credit score is in their eyes — so we’re stuck with generalities.

So, in general, the accepted standard is that those who are firmly in the “bad” credit category, which means a FICO score less than 580, will have the hardest time getting approved for a loan. Furthermore, those with scores between 580 and 700 may qualify for a loan, but should be ready to see a two-digit APR — probably at least 20% or more.

In fact, interest rates on personal loans can vary significantly depending on your credit, with APRs from around 10% going to those with excellent credit, all the way up to 30% APRs for those with the worst credit. If possible, you may want to improve your credit score — perhaps by paying down existing debt — before applying for a new loan.

If you do fail to qualify or are offered rates that are too high to be manageable, you may be able to obtain a loan by finding a friend or family member with good credit to co-sign the loan. By co-signing, he or she takes responsibility for the loan should the primary borrower default, reducing the risk for the bank.

Most borrowers can apply for personal bank loans online through a simple form, either through a lending network or a specific bank’s website. The form will require basic personal information, such as name and address, as well as financial information, including income and banking details. Most lenders, including banks, will require you to have at least a checking account to obtain a personal loan.

You can apply for a personal loan online in minutes with a simple form.

If applying directly to your preferred bank through an online form, you may receive the bank’s decision within minutes of submitting your information. For some banks, however, you may need to go to a local branch in person to complete the process and obtain your funds.

If using a lending network to broaden your options and apply to multiple banks at once, you’ll be presented with all approved loan offers after your form is submitted. At this point, you can compare rates and terms to determine the best offer. Once you select an offer, you’ll be taken to the lender’s site to complete your agreement and set up delivery of your funds.

Potential borrowers can usually get a personal loan — one of the simpler lines of credit to obtain — from a bank or other lender relatively quickly; many loans can be dispersed within 48 hours. That said, the size of the loan you wish to obtain may influence the rate and complexity of the loan process.

In today’s market, a new car buyer can expect to pay around $34,000 for the pleasure of a new car. Since the average American likely isn’t sitting on that kind of cash, people often turn to auto loans to stay on the road.

Although many aspects of obtaining an auto loan are similar to those of personal loans, auto and personal loans vary in two key ways. Firstly, where personal loans can be used to purchase just about anything you need, auto loans can only be used to purchase consumer vehicles such as cars, trucks, and motorcycles.

Secondly, while personal loans are unsecured loans and require no collateral to obtain, auto loans are secured loans for which the purchased vehicle represents the collateral. In other words, your auto loan is secured by the auto itself, and your vehicle can be repossessed in the event that you default on the loan.

Finding an auto loan may be even easier than finding a personal loan in some respects, not just because it is a secured loan and less risky to the lender, but also because there are so many different types of lenders offering auto loans. For instance, the dealership where you purchase your car will likely offer auto loans, as will your local credit unions and banks. Once again, however, your best option may be to hop online.

As with personal loans, you can shop for auto loans through an online lending network made up of many different lending partners. Often by filling out a single form, borrowers can find loan offers from several banks and other lenders, and to comparison shop for the best rates and loan terms.

The actual rates and terms you are offered will vary not just by lender, but also based on the type of vehicle you are purchasing, including whether it is a new or used vehicle. The average auto loan will come with terms between 12 and 60 months, although rising vehicle prices have led to some lenders offering terms extending seven years or more for new vehicle purchases.

As with most loan types, including personal loans, auto lenders don’t often publish hard-and-fast rules regarding the minimum credit scores needed to obtain a loan. That said, those whose scores would make it a struggle to obtain a personal loan — namely, FICO scores below 580 — will also struggle to obtain an auto loan.

Unlike with unsecured personal loans, however, low credit applicants for auto loans may have more options for obtaining approval. Specifically, borrowers with bad credit who can meet certain income requirements, typically $1,200 to $1,500 a month, may be accepted by the lender despite their credit scores.

Auto loan applicants may also be able to improve their chances by making a larger down payment on their loan. This can be in the form of cash directly to the lender, but may also include trading in a previously owned vehicle to the dealer to reduce the purchase price of the new vehicle. Either method lowers the loan-to-value ratio of the loan, reducing the risk for the lender.

The process for applying for an auto loan is much the same as that for a personal loan, especially if done through an online lending network. The main difference is that of the vehicle; in many cases, you’ll be required to have a particular vehicle selected before you can get the loan and will need to provide vehicle information during the application.

If you don’t have a specific car in mind, many lenders will offer a pre-approval process. Getting pre-approved for an auto loan will usually involve a hard credit check, which means it may have a small impact on your credit. You won’t need to provide any vehicle information to get pre-approved and it can give you a good idea of your new car budget. Being pre-approved can also make things easier at the dealer because it shows that you are legitimately interested in purchasing a vehicle.

Once you’ve found a vehicle, you can apply for the car loan. When you apply — or, better yet, before you even shop for a vehicle — you’ll need to determine the details of your repayment plan. Auto loans, like personal loans, are repaid through monthly installments, so you’ll want to look at all of the factors.

Instead of simply choosing the lowest monthly payment, be sure to crunch your numbers. A lower monthly payment made over a longer period of time can turn out to be a worse deal than a larger monthly payment over a shorter time period, so choose your loan terms carefully.

For example, consider a $10,000 car loan with an APR of 10%. While accepting a loan term of 60 months would ensure a monthly payment of only $212, the borrower would end up paying a total of $2,757 in interest on top of the principal amount. On the other hand, by choosing a shorter loan term, such as 36 months, the borrower would pay $323 a month but save $1,143 over the course of the loan.

If the average American is hard-pressed to save up the $34,000 needed to purchase a new car with cash, then putting together the median $199,200 needed to buy a house would likely seem impossible. Fortunately, just as auto loans help us drive our vehicles while we pay for them, rather than after, millions of Americans are currently living in their own homes thanks to mortgage loans.

Home loans are similar to auto loans in that both are types of secured loans, backed by the collateral represented by the object being purchased. In this case, your mortgage is secured by the house itself, which can be repossessed — or foreclosed, as it’s called in the housing industry — in the case that you default on your loan.

Since owning a home is an integral part of the American spirit, many programs are in place to encourage and support those who wish to enter the realm of home ownership. Even those with poor credit may find a way to obtain a mortgage loan and purchase their own home. In fact, the first step to getting a home loan is actually to determine which type of home loan you need.

In most cases, the type of loan you’ll need will depend on four factors, including your credit, income, and down payment amount. If you can put down 20% or more of the purchase price and/or have good to excellent credit, you may want to try for a conventional home loan.

Those who can’t afford a large down payment or whose credit would disqualify them from a conventional loan should look into an FHA (Federal Housing Authority) loan. Backed by the government, FHA loans present lower risk to lenders and thus are easier to get with poor credit. They also have lower down payment requirements, typically between 3.5% and 5% of the purchase price.

And, once again, the best place to find and compare loan offers from multiple banks and lenders is going to be an online lending network. At the same time, many major banks provide competitive mortgage rates, so shop around for the best deal.

How to Get a Personal Loan With Bad Credit

If you are in need of some extra funds, but your credit scores don’t appear to be in tip-top shape, then you may be wondering how to get a personal loan or if it’s even possible. An ideal lender would be willing to look past your credit scores and be transparent when it comes to lending you money.

The good news is you can get bad credit loans that provide you with the cash you need even if your credit scores are less than perfect. Using a personal loan responsibly can help you get on top of your finances and focus on building or repairing your credit and paying off any debts you might have.

To find a personal loan with bad credit, you will need to do some research and choose where you apply wisely — we are here to help you understand how to do that.

While a personal loan can help you get your finances under control, it’s important to note that a loan may not be the answer to all your financial problems.

There is a lot of information to consider before you attempt getting a personal loan with bad credit including the information you will need, the types of personal loans available, and what scams and other fraudulent activity you need to be aware of during the process.

Here are some tips to help you learn how to get a loan with bad credit.

Gather Your Personal Information

As you think about how to get a personal loan, start collecting some information a lender may ask about. Here are some important things to know that will help you get prepared to apply for a personal loan.

The first thing you want to do before you apply for a loan is understand your credit and your credit scores because this will give you insight into the details a lender reviews when they pull your credit.

To see where your credit currently stands, you should check your credit scores for free on Credit.com. Checking your credit scores will not affect your credit in any way because checking your own credit scores is considered a soft inquiry or a soft pull.

You don’t need perfect credit, but your credit score impacts the terms and conditions you will qualify for, such as how much they are willing to loan you and what your interest rate will be for repayment. For example, bad credit loans will likely come with higher interest rates and may be issued for lower amounts.

If you see that your score is looking pretty lackluster, you may decide to improve it before applying for a loan. Some credit score improvement options you may consider include paying down debts, reviewing your credit reports for errors (and disputing any errors you find) and limiting the number of hard credit inquiries that are placed on your credit until your score rebounds. Improving your credit score before seeking a loan can help you receive much better rates.

You will also want to take a good look at your credit report from all three credit bureaus to make sure there are no mistakes and all the information is correct. If you see something wrong, you should report it and dispute it.

Each of the three credit bureaus- Equifax, Experian, and Transunion- have their own credit report for you to look at and sometimes the information between the three may slightly vary which means it is important that you check and monitor each one of them on a regular basis to track any changes or catch any instances of suspicious activity.

Checking your credit reports will also give you a good indication of where you would stand with a creditor and may offer you insight on what you need to do to begin repairing and rebuilding your credit before you begin to apply for any type of personal loan.

If you have decided to go ahead and proceed with applying for a personal loan, take the following into consideration regarding the next steps and what you will have to do to try and qualify for the personal loan:

Prove You Can Pay the Loan Back

It’s important to note that lenders will want to know you can repay the personal loan before they issue it, and the amount they are willing to lend often depends on your ability to repay them. It’s a good idea to show how you will be repaying them by offering proof of income or having a cosigner.

A cosigner is a person that is being asked to guarantee that the debt will be paid back. If the borrower fails to make the payments, then the creditor will turn to the cosigner to collect the money that is owed on the account.

The cosigner will need to have a good credit score and credit history and having a healthy length of time reported on their credit history may also help the chances of the creditor agreeing to make the loan.

If you find that you need to have a cosigner in order to get approved for the personal loan, then they will have to be able to provide the creditor with proof of income to prove that if you fail to make the payments, the cosigner will be able to.

Talk with Your Bank or Credit Union

Next, research minimum credit score requirements for personal loans from lenders in your area. A good place to start is with the bank or credit union you currently use, as they already have an understanding of your financial profile.

Something worth noting is that credit unions may have more flexible lending standards and may be more willing to offer you a small personal loan. If you have been at the same bank for years, consider asking the bank’s loan department how to get a loan. You may also want to inquire if your credit score would qualify you for a personal loan.

Consider Which Loans Are Best for You

Remember when we mentioned limiting the number of inquiries on your credit while you work to improve it? Here’s why:

Each loan application you submit triggers an inquiry into your credit, and hard inquiries can lower your credit score roughly five to ten points. So, when you decide to start applying for a personal loan, you will want to do your research and not apply for every loan you come across.

It’s a good idea to only apply for loans from a lender you trust and has lending standards you feel confident you can meet. You may be able to find the minimum credit score a lender requires for a personal loan on the lender’s website, or you can call the lender and speak with a representative.

Loans for bad credit might have higher interest rates or be capped at a lower amount because lenders are much more cautious when doing business with people with lower credit.

Secured personal loans are some of the most common types of loans and are generally used for a car or mortgage. When you borrow money from a secured personal loan, you are securing the amount that you are borrowing with one of your assets. Your asset then becomes collateral for the loan if you are unable to pay as agreed.

A secured personal loan is risky because they can take whatever you used as collateral if you do not maintain all of the payments on the account and pay on time as agreed upon.

Unsecured personal loans occur when you borrow money from the bank or financial institution, and you agree to make all the payments as discussed until the account is paid back in full.

This type of unsecured loan, when not paid as agreed upon, may incur additional fees on top of the amount owed, but they are not secured with an asset or any other type of collateral like in a secured personal loan agreement.

There are plenty of online lenders promising loans with no credit check to people who have damaged or bad credit. While this option might sound ideal, be cautious. These websites may be nothing more than advance fee loan scams. According to the Federal Trade Commission, a lender not seeming interested in your credit history is a big red flag and could indicate a fraudulent website.

If you are someone hoping to get a personal loan with bad credit, you may be the ideal target for scammers or fraudulent lenders. Consider contacting your state’s Department of Banking or Department of Financial Regulation to see if a lender is registered to do business within the state.

The Better Business Bureau can also tell you if any customers with bad credit have filed complaints against specific lenders.

One of the biggest consequences of having bad credit is being more susceptible to scams and other fraudulent behavior. Just remember, every legitimate lender will want some proof telling them that you will be able to pay back the loan.

Also, a red flag of a scam would be when the lender says you have first send them some kind of upfront payment before they can give you the personal loan. You will also want to be careful not to provide any sensitive information such as your social security number or bank account information without first obtaining the legal written documentation concerning the loan.

Let’s take a closer look at what it means to want a personal loan. Personal loans are typically loans given by a bank or other financial institution and are usually unsecured and are installment loans that can help the borrower do a number of things such as consolidating their debt or making a payment on something they weren’t expecting.

A payday loan offers a lower amount of money at an even higher interest rate than other personal loans. Payday loans are also to be paid back when the borrower receives their next paycheck which makes it a very short-term personal loan to help cover any unexpected expenses.

Payday loans also have an additional cost of anywhere between ten and thirty dollars for every one hundred you borrow, and these types of loans generally have a cap of about $500.

Payday loans do not require any kind of credit check from any of the three major credit bureaus which means obtaining one will have no initial effect on your credit score. However, if it is not paid back within the two to four-week timeframe, it is then sold to a debt collector and placed in collections which will show up on your credit report with adverse effects. Payday loans also usually come with extremely high-interest rates, so you will be paying much more back than the amount you initially borrowed. All considerations to make prior to obtaining a payday loan of any kind.

Next, we will determine what exactly qualifies as bad credit.

Credit scores can range depending on the model you are looking at. FICO scores, for example, fall within the range of 300 and 850. 300 would be the lowest spectrum of credit in this model and 850 would be the highest possible score you could have.

On average, creditors will say that a good credit score would be somewhere between the 700 and 850 mark. An okay or fair score would fall between 620 and 679, and a low to poor credit score will be anything falling under 580.

If you are in the lower spectrum, you may want to reconsider trying to get a personal loan because you will be faced with much higher interest rates, if you are approved for the loan at all.

If you find that you will not qualify for the traditional personal loan, peer-to-peer lending is another method of debt financing that can help enable individuals to borrow and lend money to other individuals without a financial institution as the middleman.

With peer-to-peer lending, the lender will take funds from their own money to lend to an individual after determining the amount and an agreed upon interest rate for repayment of the loan.

Peer-to-peer lending is often referred to as a type of crowdfunding because it is offering unsecured personal loans to people who may not otherwise be able to get a personal loan the traditional way.

The bottom line is to do your research before applying for any kind of personal loan when you are faced with bad credit. It is also recommended that you look at other alternatives such as attempting to rebuild your credit and build up your credit scores first, so you have a better experience and receive a better APR. Sometimes a personal loan and bad credit are best left separated, and a better look at your credit history with a credit check will yield more positive results.

Remember, a personal loan is not always the answer when it comes to your financial woes. Sometimes thinking more long-term may get you to arrive more successfully at your goals for your future financial health and freedom.

This article has been updated. It was originally published November 1, 2016.

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Silvia – I am not sure I understand your question. However, I would suggest you contact a reputable credit counseling agency for advice on how to resolve your debts. You can find one via the website of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

i have a 615 score but a want to get a better score but just dont know how, i leave in nogales arizona , i need help..

Getting a Loan with Bad Credit? It’s Possible. Here’s How.

Let’s face it: Nobody likes to be judged. But when it comes to loans, it’s going to happen. Creditors are going to look deep into your credit history and make a decision about whether or not to lend to you. Lenders need to determine how risky it would be to lend money to a borrower. And if you’ve got bad credit, you might expect to be shown the door right away.

But don’t panic! Even if you have bad credit, it’s still possible to get a loan. Here’s how.

Know Your Credit Score and Know What It Means

Lenders know your credit score, and you should too. When you’re applying for a loan, that three-digit FICO score is going to play a big role in whether or not you’re approved. If you don’t know your FICO score, there are plenty of ways you can find it. You can sign up for a company like CreditKarma.com; you can ask your bank if they provide free credit scores; you can even request one directly from FICO themselves—though they’ll make you pay for it.

So how can you find your credit score? And once you know it, how can you improve it? Check out the OppLoans ebook Credit Workbook: The OppLoans Guide to Understanding Your Credit, Credit Report and Credit Score to learn if you have bad, fair, or good credit—and then, what you can do about it!)

Once you know your credit score, you’ll know how a lender will “judge” you. Typically, they classify borrowers according to the following categories:

(You can read about the implications of your credit score here.)

When it comes to getting a personal loan, borrowers with a credit score above 720 typically pay an 11-percent interest rate. Those with subprime credit pay almost three times as much – 29 percent! For borrowers with a credit score below 550, many traditional lenders won’t offer a loan at all.

Sound Advice: Don’t despair! Borrowers with bad credit still have options like safe installment loans and certain “no credit check loans” (or “soft credit check loans”!)

If you happen to fall into the “poor credit” category, you’ll likely find your loan application has been turned down at the bank. However, you won’t have to look far to find people, both online and on the street, advertising “quick cash” for borrowers with bad credit. Many of these are payday loans, and they are dangerous.

Payday lenders will likely give you a loan, but they’ll make you pay for it. Literally. You can expect an APR of 350 percent or more. Rates that high are how payday loans trap low income borrowers in a cycle of predatory debt. [1] So if you’re thinking about taking out a payday loan, DON’T DO IT.

Worried you might be dealing with a predatory lender? Check out the warning signs in our ebook “How to Protect Yourself From Payday Loans & Predatory Lenders“.

If Your Credit Is Bad, Build It

Here’s the truth: Bad credit can mean that you’re going to have to pay more for a loan. It’s as simple as that. However, your credit score isn’t written in stone. If your credit is currently lower than you’d like, the best thing to do is build it up before taking out a loan.

We know, it sounds daunting. Also, it’s going to take a little bit of time. But don’t worry, you can do it by following these six steps.

Sound Advice: Stay below 30 percent of your credit card limit to boost your credit score.

Consider Personal Installment Lenders

Building credit sounds great, but sometimes emergencies happen and you need funds immediately. A payday loan might be tempting, but there are better options out there.

One place to look is with personal installment lenders. A personal installment loan can used to cover emergency expenses or to consolidate higher-interest debt. These lenders consider many factors when evaluating a loan application – not just your credit score –so you’ll probably have better luck with them. Also, not to toot our own horn, but OppLoans was recently rated the number one personal lender by LendingTree based on customer reviews. Toot toot!

Secured loans are a good way for borrowers with bad credit to boost their appeal when applying for a loan. With a secured loan, a borrower offers an asset – a home or car, for instance – as collateral. It makes lenders more likely to approve a loan because they know they can take possession of the asset to cover their losses if the loan is not repaid. Just make sure you avoid short-term, high-interest title loans! They are definitely not worth the risk.

Sound Advice – Be careful when choosing collateral for a secured loan. If you default on the loan, you will lose your collateral.

Credit unions are a good option for borrowers with bad credit. They’re like banks, but when you apply for a loan, they don’t evaluate you purely on your credit score. The trick, however, is that you have to be a member, so you have to convince them to grant you membership. They look at your financial health, but they also make a decision based on factors like where you live, where you work, or where you went to school. You can search for credit unions near you through mycreditunion.gov.

Sound Advice: Professional groups often form credit unions, so try to find one through your job.

Another option for borrowers with bad credit is to get a co-signer. With a co-signer, the interest rate for the loan will be calculated based on the credit rating of the person you sign with. So find someone with good credit who trusts you to repay the loan. But be careful. That person will be equally responsible for payment, so if you fall behind, they’ll suffer for it too.

Sound Advice: Cherish your co-signer. Payment information will be recorded to both of your credit reports.

At OppLoans, we believe that you deserve better than a payday loan. That’s why we offer personal installment loans with longer terms (6-36 months) and lower rates (up to 125 percent less) than your typical payday or title loan. Plus, our customers rate us an average of 4.8 out of 5 stars on LendingTree and Google.

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