Loan Options When You Have Bed Credit

Taking out a loan when you have a bad credit history can be next to impossible. Banks are unlikely to lend you money if they are afraid you won't be able to pay it back on time. When you find yourself in a financial hole and you need to take out a loan, there are several places you can look to if you have bad credit score. Below we'll go over some of these options for you so that you can know where to turn.

Borrow From Family or Friends:

This one is risky in a different way than other loans. If you borrow money from family or friends, you run the risk of damaging the relationship. If you go this route, be sure to pay back your loan as quickly as possible. Family and friends will probably be fine with lending you money if you really need it, but their personality may change if you fail to repay them.

Logbook Loans:

If you own a car, you can easily take out a logbook loan. These loans are simple to find from our site, and you can have your money in no time at all. The only thing you need is your V5 (or logbook), an MOT certificate, and some proof of income (like a pay stub). The lenders will work with you to make an affordable repayment schedule. There is always the risk that you can lose your equity, but the lenders will work with you to try and limit this from happening.

Use Your Home as Equity:

This one is a bit of a risk, as if you fail to repay your loan, you're suddenly homeless. This one is used if you are taking out a large loan. Chances are though if you own your home, a bank will be more willing to give you a loan.

Get a Co-signer:

If borrowing from a friend or family member is not an option, you can still ask them to be a co-signer on a traditional loan. If they are confident in your ability to repay the loan, they may be willing to use their good credit score to help you get a loan. This comes with similar risks as asking them for a loan directly, because if you fail to make your payments, the co-signer is also responsible. Their good credit score will suffer if you are consistently late with your payments. Always take into consideration the cost to a relationship before asking someone you know to be a co-signer on a loan.

Visit a Credit Union:

Lastly, if there is a credit union in your area, you can try getting a loan from them. With a credit union, you are required to make a deposit. The amount you can borrow from the credit union will depend on how much you can deposit into the credit union. If you have enough cash to deposit, then you may want to consider going to a credit union.