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This content is for informational purposes only and is not intended to provide financial advice.
Several options are available if we have bad credit and are looking for a loan. We can choose from various lenders. Depending on our specific needs and the amount we need to borrow.
Prosper
Prosper may be the answer if we’re looking for a loan to consolidate debt, refinance our home, or make big purchases like remodeling projects or a new car. This peer-to-peer lending platform connects borrowers and investors directly with each other. The application process is simple: fill out an online form about ourselves and what we want to do with the money.
Prosper will then send us loan offers from other applicants who want money for similar reasons as ours. We can accept one of these offers or tell Prosper what amount and interest rate we prefer. Once both parties (borrower and investor) approve, loans are funded within a few hours.
LightStream
LightStream is a SunTrust Bank division that offers personal loans, home equity loans, and home equity lines of credit.
LightStream offers fixed and variable-rate loans. The APR can be used for various uses, including buying a house or paying off student debt.
SoFi
SoFi has an excellent reputation for helping people with bad credit get loans. The interest rates are usually lower than other companies.
Freedom Plus
Freedom Plus is an excellent option to consider if we have bad credit and are looking for a loan. This company offers personal loans with bad credit and a high APR and installment loans with bad credit. The loan application process with Freedom Plus is easy to follow; it only takes a few minutes to complete the online form, which asks questions about our income level, employment history, and other details about our financial situation.
Online Lenders
Online lenders are known to be cheaper than others, but they may charge higher interest rates and fees. They are also not as strict with their requirements as other lenders. We can apply for a personal loan with bad credit through online lenders, but they’ll likely require us to pay more than if we were approved elsewhere.
Friends or Family
We can always ask friends or family for a loan in a pinch. However, this is not the best option because it can strain our relationship. This option is only good if we have a perfect relationship with them and know they will forgive us at some point.
Private Student Loans (With a Cosigner)
Private student loans are a great way to bridge any funding gaps that we might have. They can be used for various purposes, such as paying off our student loan debt, purchasing textbooks and supplies, or moving into a new apartment after graduation. These loans are not government-backed, so they come with higher interest rates than federal student loans, but they offer more flexibility regarding repayment plans and cosigners.
The main difference between private and federal student loans is that private lenders don’t require us to prove financial need to qualify for their product. Instead of filling out the Free Application for Federal Student Aid (FAFSA), we will complete an application specific to the lender in question and send it back along with any other documents required by them (like tax returns). Private lenders will also want proof of income like pay stubs or W-2 forms—not just an estimate on FAFSA like we would need if applying for federal aid.
In addition to this step involving paperwork during the application process, private lenders typically require one person from both parties involved (student plus cosigner) with good credit history to keep things moving smoothly when it comes time to pay off those significant monthly payments.”
Rent-to-Own Stores
Rent-to-own stores are a good option for people with bad credit. These stores exist in high-traffic areas and are often located near malls, big cities, and small towns. Usually, rent-to-own stores can be found in the same building as other types of businesses, like pawn shops or electronics stores.
Using a Credit Card Cash Advance
Credit card cash advances are an option but should be used as a last resort. Interest rates are high, and we’ll be charged a fee. The interest on these loans accrues immediately, so there’s no grace period to pay off the advance and avoid interest charges. We will also have to pay off our balance within one month or face even higher interest rates and fees.
OneMain Financial
OneMain Financial is a consumer finance company that offers personal loans, auto loans, and other financial products. OneMain Financial makes it easier to apply for a loan because we can choose from multiple lenders at once. If we have bad credit or even no credit (if we’re applying for a car loan), it can help us find the right lender for our situation.
Payday Loan Shops
The best thing to do when we have a bad credit score is to avoid payday loan shops. While we can get a payday loan at these shops, they are not regulated by the government and will charge higher interest rates than other lenders. Payday loans are not meant to be used as long-term solutions, so if we don’t plan to pay back our balance within two weeks, it’s best to look for another option.
Upstart
Upstart is a lending platform that focuses on helping borrowers with great ideas, and ambitions get their start in life. It’s an online lender, but the company has its unique way of working — or, instead, it’s not working.
Upstart’s mission statement: “We believe that people can make good decisions if they have the right information available to them at the right time—and we also believe in human potential.” This means that Upstart provides its customers with low-cost loans and gives potential borrowers access to data about themselves and their futures based on factors such as career trajectory, education level, and income potential.
If we have had a bad credit score in the past, it doesn’t mean we can’t get financial help. Many options are available to those who have been turned away by banks or other lenders.
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