If you need money in a hurry, a personal loan can be helpful. Getting a loan with bad credit, though, is tough. Below are a few tips that can help you figure out how to get a personal loan even with a low credit score.
Understand Your Score
If you’re interested in getting a personal loan, your first step should always be to understand exactly what you mean by having a low credit score. There is a huge difference between having a score that’s above six hundred and one that’s below five hundred fifty, for example, and understanding exactly where you stand will give you a much better idea of both where you can find a loan and whether or not you should bother applying for a personal loan in the first place.
If you do think that your credit score is high enough to qualify for some loans, it’s still a good idea to shop around. Lenders have a variety of loan products on offer, some of which might be better suited to your personal financial situation than others. If you want to have a better chance of making it through the application process without getting rejected, it’s typically going to be a great idea to check finance43.com for those companies that are willing to work with individuals who have imperfect credit but who might have other useful qualities.
You should prepare to ask yourself a few different questions as you shop around. Start by asking yourself:
- What is the minimum credit score for this lender?
- What is the average interest rate?
- What fees are attached to the loan?
- What factors are used in determining my acceptance?
If you can come up with satisfactory answers to all of these questions, you’ll be able to move forward and apply for a loan with at least a baseline sense of confidence. If you can’t answer the questions, though, you need to continue your search.
Look at Your Income
If you have a poor credit score, the most important asset that you’ll have is your income. While absolutely every legitimate personal loan lender will look at your credit score to make a decision, there are many who will use your income as the major factor in determining whether or not they give you a loan. As such, you’ll want to make sure not just that you have proof of a regular income, but that you can prove that you’ll be able to make your payments back to the lender.
As such, you’re going to want to do a little more research. Make sure you know exactly what interest rate the loan originator uses and what fees might be attached to your loan. Once you know that, you can calculate roughly what the monthly payments will be on your loan and whether you not you would theoretically be able to afford those payments.
While the lender doesn’t necessarily need to know about your actual ability to repay, lenders will be much more likely to work with you if your finances are in order and you look like you would have the ability to pay back the loan on paper.
Consider a Co-Signer
If you feel that your credit is too low to apply for a personal loan or that your income might not be enough to overcome the issues with your credit, you can apply for a loan with a co-signer. Typically speaking, the co-signer will need to have better credit than you and show that he or she has the theoretical ability to pay back the loan. The good news is that you can generally get a better interest rate if you borrow with someone who has a good credit score; the bad news is that you’ll make the other party responsible for the loan. Only borrow with a co-signer if you can ensure that you’ll pay the loan back.
It is possible to get a personal loan with bad credit. Start by understanding exactly how bad your credit score actually is, then take a look at various loans out there. You can get a loan with the right kind of income or with help, but always make sure you pay attention to the terms. Taking out a personal loan is a great idea so long as you can pay it back.