If ‘I Have Bad Credit, I Need A Loan’ Sounds Like You


The heart-felt cry of ‘I have bad credit but I need a loan’ might sound familiar to many of us, especially those of us who took a while to learn how to manage money. The situation is uncomfortable and someone in this position might be tempted to despair, but there are actually several pots of gold available to even those with low credit scores.

Whether the individual in this position has mismanaged money, over-extended his ability to repay already borrowed funds, suffered a divorce or lost a job, been saddled with high medical bills, or simply been careless with balancing income and outflow in a timely manner, the resulting low credit score creates a problem when a loan is needed.

The need for a loan can still be very real, no matter what caused the situation. One of the easiest options for someone who needs money is to borrow it from family or friends. Those in a close relationship to the needy one are more apt to be sympathetic than strangers, and may lend money at easy terms or at no interest at all.

If the borrower wants to be more independent, there is the possibility of getting help from a bank or lending institution. One option is to borrow against the equity in owned property. A home-equity loan usually comes with attractive terms and repayment schedules.

Banks will also sometimes overlook the low credit score of the primary borrower if there is a co-signer with a strong financial position. The co-signer agrees to repay the loan if it is defaulted on, but has no costs if the loan is repaid properly. A co-signer could also arrange a loan by putting up security for the money received; the assets placed under lien would not be affected if the loan is repaid as scheduled.

Loans can be taken out against insurance policies and 401K plans, and will be dependent on the value of the asset rather than on the borrower’s credit score. These loans reduce the amount of the investment until they are repaid, but can come in handy when needed.

If those options are not attractive or possible, the one in need of funds can perhaps use a credit card. The terms of a personal loan will often be easier than a credit card repayment, but getting a cash advance can provide fast relief.

If the borrower-to-be has no credit cards that can be used, there are payday loans. These short-term loans require that the applicant have a job and a bank account in most cases, but usually do not require a credit check. Therefore, the bad credit is not a factor. These loans are generally quick and easy, with funds available soon after approval.

Other sources of cash for those with credit problems are pawn shops, employers, and government programs. Pawning a valuable asset usually brings a low return, but the asset is reclaimable when the loan is repaid. Employees can sometimes get a loan, or really an advance, at the Human Resources office at their place of work. School loans for books and tuition are an example of a government program.

All of these options are something to think about. It is harder for someone who is in the position of ‘I have bad credit need a loan’ to move forward, but it is not impossible.

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