3 ways to get money with a bad credit score
Getting a loan is a complicated process, and with a bad credit score, the process becomes even more stressful. However, there are some ways to get a loan despite a bad credit score. There are some tips one can follow to improve one’s chances of approval or reach out to some online lenders who offer loans to people with bad credit scores. That said, here are three ways individuals with bad credit scores can obtain money.
1. Add a co-signer
In some cases, having a co-signer with a better credit score can be beneficial to obtaining a loan. This means that they take equal responsibility for paying the loan back, which makes it easy to get a loan even with a bad score, as together, one’s credit score improves. It is always advised to make a repayment plan with the co-signer beforehand and ensure clear communication with this agreement.
2. Check with community credit unions
Before heading to other financial institutes to check for loans on bad credit scores, one must first approach known community credit and bank unions. If the bank knows a person and their spending habits, they may offer better loan terms than other lenders despite the low credit score. However, if this option does not work, some online lenders can offer loans to those with a bad credit score. Here are two options:
- Upstart
This is a good lending platform, especially for anyone seeking a personal loan. One of their selling points is that there is no minimum credit score required, which makes anyone eligible to get a loan. Their requirement suggests that one must have some credit score and the individual must have passed a higher education program. Another thing to consider is that they do not give too high interest rates. However, this may vary from case to case, but it is affordable for someone with a bad credit score. - Regions
One of the pros of getting a loan from Regions is that there are both secured and unsecured loans available, the interest rates are low, and there are no origination fees. However, there are some limitations to getting a loan through Regions, which include the borrower should already have an account with them, and the loan amount cannot exceed the available deposit account balance. Another thing to be careful of is that there is a late charge fee when the money is not paid on the agreed-upon due date. The late fee is 5% of the unpaid amount and goes up to $100.
3. Provide collateral
For the banks to know that one can repay the loan even with a bad score, it is important to provide collateral they can use. This increases one’s chances of getting a loan as it decreases the risk of lending the money. In an unfortunate case when the repayment is not made, the lender at least knows they can sell or auction off the collateral to get their money back.
