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How to Get a Loan with Bad Credit: Is it Worth the Trouble?

You can still get a loan even if you have bad credit. Surprised? You shouldn’t be. Let’s listen to Maegan’s story:

“I had three credits cards and I maxed them out. Sounds familiar? Your story, too? Perhaps like me, you’ve done these things. Grocery shopping without a list. Throwing everything that looks delicious into the cart. Throwing them out two weeks after because you just didn’t know what to do with all the fruits and vegetables you bought. That’s just the beginning of it. How about lining up for the latest smartphone on the day it’s released, even when the one you have is working perfectly. Or pedicures and massages twice a month. This went on until I my credit cards were maxed out, I couldn’t pay even the minimum amount, and I started defaulting on my car and mortgage payments. I’m trying to turn a new leaf over, but times are hard. There are months when I badly need to get a loan and I’m scared to apply for a loan because my credit scores are too low. Is there hope for me?”

-Megan

Maegan wants help on how to get a loan with bad credit. Luckily for her, there are ways to do it. Bad credit loans are a type of loan offered by select online lenders who are willing to take the higher risk of extending loans to people with bad credit. These loans are popular in the US, and also in the UK and Canada. With or without guarantee documents such as collateral you can avail loans for whatever purpose suits you. These purposes may include monthly payments for your car, loan consolidation, wedding expenses, holiday expenditure, medical payments, electric bills, and more. Once you’ve answered the question of how to get a loan with bad credit you are free to use the loan according to your needs. Is there a distinction between good credit and bad credit? Find out in “Bad Debt Myths Debunked: Do Good Debts Exist?

The better thing to do, however, is to protect your credit rating in the first place so that you don’t have to spend sleepless nights worrying about how to get a loan with bad credit.

What is good credit?

Credit rating or credit score is a lender’s way of determining your ability to pay back a loan. The higher your rating, they greater chances of repayment there are. This usually comes with better terms for your loan package because there is a lesser risk that the lender won’t get the money back. Sounds fair, yes?

Your credit rating is computed by credit reference agencies, which are commercial companies that compile information from a number of different sources, including the electoral roll, county court judgments and financial institutions. They sell this information to lenders and other service providers in the form of credit reports which help them to decide whether to grant an application for a loan, credit card, or provide another financial product.

Do you have a right to credit?

So you ask the question, do I have a right to credit? The answer is, you don’t. There is no way you can force a lender to give you money against the lender’s will. That’s the law and that’s how things will stay unless something upsets the way the world handles money. But can you get a loan even if you have bad credit? Your certainly can. That being said, it’s important to emphasize that you do have a right to protect your credit standing, which is important if you eventually want access to good credit and avoid abusive and predatory lending practices. Always do your homework and read up online resources so you’ll be aware of the things you need to be looking out for. This article on predatory lending by the Dollars and Sense magazine is a good start.

James Anthony

By James Anthony

A senior FinancesOnline writer on SaaS and B2B topics, James Anthony passion is keeping abreast of the industry’s cutting-edge practices (other than writing personal blog posts on why Firefly needs to be renewed). He has written extensively on these two subjects, being a firm believer in SaaS to PaaS migration and how this inevitable transition would impact economies of scale. With reviews and analyses spanning a breadth of topics from software to learning models, James is one of FinancesOnline’s most creative resources on and off the office.

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