“Applying for personal loans with bad credit scores is rife with uncertainty, but through a loan, it is possible to rebuild a credit reputation and secure a better financial situation. ”
If you have bad credit, finding a personal loan can be tricky but it is totally doable. Personal loans are a good option if you are looking to fund a big expense, cover a special purchase, consolidate debt, or get rid of high interest rate balances. Personal loans offer interest rates that are significantly lower than credit cards, potentially saving you thousands of dollars in interest. While bad credit will not stop you from getting a personal loan, you will need to be strategic about it. Here are 5 tips on how to secure a personal loan if you have bad credit.
- Find a transparent lender you can trust: This is a critical first step in pursuing that personal loan with bad credit, as there are many predatory lenders and scams out there that will make you all kinds of promises while keeping you trapped in a cycle of debt. Basically, you want to work with a lender who will be upfront about rates and fees, flexible on terms, and willing to look at your entire situation, not only your credit score. A credit union is always a good place to start, as these are nonprofit organizations who work to pass along earnings in the form of lower fees, strong customer service, and a certain degree of flexibility.
- Arm yourself with information: Don’t wait for the bank to surprise you—be sure you know where you stand long before you have that conversation with the loan officer. The first step to take here is to go to one of the free credit score sites online and get a copy of your credit report and score (typically a score below 580 is considered bad credit). Then take the time to review that credit report to determine if there are any mistakes. If you find an error, take the time to rectify it. Although time consuming, even a little error can make a big difference in your credit score.
- Do your research ahead of time: Once you know your credit situation, then take the time to find out what’s out there. You can research online to find out what the financial market is like and what you can expect in general from different lenders. It’s recommended that you compare loan offers from …