Smart Options for Getting Loans despite Bad Credit

Having a bad credit or no credit proves to be a major obstacle in acquiring a loan as you are regarded as a high-risk client who might be defaulting in future. You need to come to terms with the fact that it is imperative to boost your credit rating if you wish to qualify for loans from traditional institutions and reputed banks. They would be conforming to standard lending guidelines and would not entertain people with bad credit scores. There are, however, many other smart options open to you, if you are seeking loans despite a poor credit score.

Consider Credit Unions

Credit Unions are just like banks but are actually owned by members with some common interest, for instance, they may be from the same industry; they may be residing in the same locality or geographic area etc. Credit Unions are essentially non-profit organizations which pass on the income to its members in terms of lower fees and highest levels of customer service.

Opt for Home Equity Line of Credit

If you seem to be having enough equity associated with your property, you may end up getting a tax-deductible and relatively low-interest line of credit for spending it any way you wish to. However, if you are seeking home equity, automatically you are jeopardizing the safety of your property. In case you are unable to make the repayments, you may lose your property. However, if you have a steady source of income and also if you are disciplined and sincere about making timely repayments, this could prove to be an affordable option irrespective of your credit rating.

Payday Loans or Cash Advances

As we have discussed earlier you know that poor credit rating implies that you are a high-risk client to most of the big banks and major lending institutions. All these major lenders would be sticking to strict standards and relying chiefly on credit scores while approving loans and while calculating the loan terms. Today you have access to payday lenders who offer money to people even with poor credit profiles and they do not interfere in the way you use the borrowed sum of money. A payday loan lender is essentially a bad credit lender coming to your rescue in times of financial lapses and sudden emergencies. These are short-term loans and usually, you are expected to pay back the entire amount using your next month’s salary.

These lenders operate online and provide competitive loans to you for enjoying a vacation, doing home improvement, paying for medical emergencies etc. They are pretty prompt and online applications are processed within minutes if you have provided all mandatory information and relevant documents. Funds would be transferred directly to your bank account within hours.

Request a Cosigner

Look for someone who trusts your intentions and ability to make the repayments and loves you enough to take the risk. You must never forget that if you fail to repay, your cosigner would be compelled by the creditor to make the full payment. You and your cosigner’s credit score would be impacted adversely. This could be quite distressing for the co-signer.


If none of the above-discussed loans work for you, try your best to boost your credit score for qualifying for any traditional loan. You could consider boosting your credit rating simply by promptly paying off all your bills and not overstretching yourself on credit cards and loans. 

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