If you’re in a situation where your credit has gone to the dogs, it can be really difficult to figure out how to get out of it. In some cases, you may find that it is really hard to get any sort of money, whether a loan or a credit card, because of your bad credit.
So, what are you supposed to do in those instances? How are you supposed to get your hands on extra cash if your credit is bad? Here’s a quick look at some options that are available for you if you’re looking for a loan.
What is Bad Credit?
Bad credit, or rather “very poor” credit, is when your credit score is below 579. At that point, very few places will give you a loan, and most of the places that will give you a loan will often charge very high rates when it comes to interest.
Fair credit, which falls between 580 and 669, can cause some of the same issues. Typically, the best interest rates and loan or credit card deals are going to be reserved for people who have a credit score of at least 700.
One of the easiest ways to get a loan with bad credit is to get a payday loan. These are great if you just need an extra $300 for an emergency or if you need to sort out the bills and your paycheck doesn’t come in time.
Payday loans are unsecured, which means that the only collateral involved is the interest rate. You and the payday loan company will set a date in the future as to when the loan needs to be paid off (typically near your next payday, hence the name). Then, you will get the money almost instantly.
More often than not, you’re going to pay back a payday loan within 2 weeks, and if it isn’t paid off, you will need to pay additional interest and late fees (like any other loan out there). These have become quite popular and are a simple way to get a small amount of money fast.
Another type of loan that you can consider is called a title loans. Title loans use your vehicle’s title as collateral. So, they will figure out how much your car is worth and you’re able to borrow up to that amount of money from the company.
Like payday loans, they don’t require your credit score and you can typically get approved within 24 hours. They’re a great option to consider, especially if you’re in a situation where you know you can pay off a loan, and you don’t mind using your title as collateral.
If you don’t pay a title loan, the title loan company can put a lien on your vehicle, which means that you can’t sell it and that they could possibly take possession of it (depending on the contract). Always read your contracts carefully before signing anything.
Friends and Family
In some situations, you may need to turn to friends and family in order to get the help that you need. It can be hard to ask for this sort of help, but many people are willing to give the people they love a hand.
That being said, be sure that you set clear boundaries for the loan and that you do your best to stick to them. The last thing you want to do is get into a situation where your relationship is permanently harmed due to a misunderstanding about money.
Your Local Bank or Credit Union
It’s likely that you already have an account at a local bank or credit union. If so, then you want to contact them and see if they offer any type of loan for people in your situation. If not, then it may be time to get out there and start shopping for a bank or credit union.
While not all banks or credit unions have options for people with poor credit, enough of them do that it’s worth a look. Do some research and see if you can connect with one that is willing to give you a hand.
It’s not easy to find a loan that works when you have bad credit, but you do have plenty of options to consider. Do as much research as you can ahead of time and be patient – you’ll be sure to find something that meets your needs and that is going to help you get through.
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