Getting a Loan with Bad Credit

If you have bad credit, your chances of getting a loan from a bank or other financial institutions can be very slim. Even if you somehow get approved, you will be faced with high interest rates. There are things you can do to improve your credit score, but if you are in urgent need of money, here are some avenues to explore apart from asking your friends or family members for help.

1. Prove that your financial situation has improved. If you can get a personal interview with a sympathetic creditor, you can show that your bad credit was in the past and that your present financial situation is stable. If you can show that you have a stable job and not much debt, you have a much better chance.

2. Approach a credit union. Credit unions are run as non-profit organizations by members who have something in common. Most credit union members are middle class people and the board that runs the company might be more sympathetic to your troubles and look beyond your credit history.

3. Take out a line of credit. If you are a homeowner who has quite a bit of home equity, you can take out a line of credit. These are open-ended loans, so be careful about how much you borrow and make timely payments so that you do not further damage your credit score.

4. Explore peer to peer loans. There are websites which act as middle men between the lender and the borrower. The borrower explains his need in detail and the lender can choose from the available options. Here also, there is an initial credit check, so if you have very bad credit score, you have less chance. But if you get past the screening, you have a good chance of getting approved.

If all else fails, try a family member that you trust. If you haven’t made this a monthly routine they may be able to help. Remember, things will get better so explore all the options.

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