Why Bad Credit Doesn’t Mean You Can’t Get a Loan

Although having bad credit is never seen as a positive thing, it does not mean that you will be denied every loan for which you apply. There are plenty of options for those with bad credit, as long as you know where to look. Before you get discouraged about the state of your credit rating, research these loan options and find out which types of lenders are more likely to grant you the money that you need.

Credit Cards

Perhaps the easiest way to receive a loan with bad credit is with a credit card. Certain companies offer credit card options for those with bad credit, and taking advantage of one of these will give you the chance to rebuild your credit rating. Some of these cards are secured, which means that you will be required to pay a deposit ahead of time. This deposit can then be applied to your balance owing after a certain time period. With a secured card, you will also have a higher interest rate and a lower credit limit than you would with most other credit cards, but it is worth it to be able to begin getting your credit back on track.

Debt Consolidation Loan

Another loan for those with bad credit is a debt consolidation loan. This type of loan is meant to give you a second chance, and it does this by taking all of your existing debts and consolidating them into just one simple monthly payment that you have to make. Although debt consolidation loans come with a high interest rate, they give you the opportunity to repair your credit.

Personal Loan

A personal loan is probably the most difficult to get with bad credit, but that does not mean that it is impossible. Lenders are likely to give you a secured personal loan, which means that you will have to put something up as collateral. While this is not a perfect situation, since you will lose the item that you have secured against the loan if you are unable to make your payments, it does provide you with the money that you need.

Car Loan

Although car loans can be difficult to secure with bad credit, you have a good chance of receiving one if you go through a car dealership. The dealership will go to a creditor for you and will assume some of the risk. Under these circumstances, you will have to deal with a higher interest rate, since the dealership will want a payout on top of your regular interest rates. You will end up paying much more for the car, but it is a good option for those who want to finance a car with bad credit.

You Always Have Options

Just because you have made credit mistakes in the past does not mean that you are doomed forever. There are plenty of lenders out there who will take a risk on you, as long as they are rewarded for this risk. The reward comes in the form of higher interest on your loan, but that is something that you will have to deal with if you want to borrow money with bad credit.