Approximately one third (that’s 33 percent) of people in the U.S. have a credit score under 601, which is considered bad to fair credit. Unfortunately, this is a trend that seems to be holding steady.
If you are one of these millions of people, you may believe that getting a personal loan – or any type of loan for that matter – is impossible. Believe it or not, you do have options!
If you use the tips found here to get personal loans for bad credit, you will find that it’s actually easier than you may have thought. Keep reading for some helpful tips to get the funds you need, when you need them.
1. Know Your Credit Score (and What it Means)
Any lender you apply with is going to know your credit score. You should know it, too.
When applying for a bad credit loan, the three-digit FICO score has a huge impact on if you are approved. Are you unsure of what your score is? If so, now is the time to find out.
Once you know what your credit score is, you may want to take steps to improve it – this is going to give you a better chance of being approved for the loan you need. Keep in mind, the better score you have, the lower the interest rate you are going to be given.
2. Find the Right Lender
Some of the financing sources where you can acquire a personal loan, including one for someone with bad credit, including online lenders, credit unions, and banks.
Each one offers an array of interest rates, and the terms for the loans they provide are going to vary. This is why it is so important to shop around and find a lender that offers the terms that best fit your particular situation.
3. Consider a Secured Loan
A secured loan is a great way for a borrower who has bad credit to boost your appeal when you are applying for a loan. When you choose a secured loan, you provide an asset – like a car or home – as collateral for the money you receive.
This makes you more appealing to a lender because if you don’t pay, they can take possession of the asset in question. Just be careful with the lender you choose.
4. Don’t Take a Bigger Loan Than You Can Realistically Afford
You need to figure out the amount of money you really need. Once approved for a loan, don’t take more, just because you are offered more.
If you take a bigger loan than what you can afford, it is just going to hurt your financial situation even more.
Getting Personal Loans for Bad Credit
When it comes to getting personal loans for bad credit, you do have options. Use the tips and information here to ensure you receive a quality loan that provides you with agreeable terms.
If you found the information here helpful, be sure to check out our blog on what you can use your personal loan for.