Archive for the ‘bad credit’ tag
How to Borrow Money With Bad Credit
Typically when a person borrows money they first need to get approved by the lender. In reality, there is not really a difference for someone with bad credit. They will still need to get approval. The main difference is that if you have bad credit as opposed to a good credit history you may not be able to borrow from traditional lenders and you will likely pay much higher interest rate charges.
If a traditional lender such as a bank will not loan you any money, you still have other options, they are just more costly. Lenders do not like to loan money to people who will not pay them back, and who can blame them. Therefore once your credit is below a certain level the traditional lenders will usually decline you for a loan.
If traditional lenders have declined your application then the best way how to borrow money may be from friends or family as they may lend you money at a better rate. If that does not work out for you, then it is time to look at other options.
First is this for a short term or long term loan? This can make a huge difference as if it is truly short term and you will have the money without a doubt to pay it back rather quickly then you may want to consider a payday loan. This is generally only a decent option if you can pay it back when you get your next paycheck.
If you need more time then a couple of weeks, but less then three months you may want to consider either a title loan if your vehicle is paid off or taking something you own free and clear to a pawn shop. Both of these charge high interest rates but if you have the collateral in an asset it can get you some money fairly quickly. Again only do this if you can pay it back within a few months and yes you will pay a high interest rate.
Depending on your circumstances other options may include refinancing a current loan with a cash back option, but this is generally not a good idea as the interest rate will likely be high and it may extend your payment terms. This means over the life of the loan it could cost you a significant amount of money then it would have.
If none of the above work then it may be time to raise some money without a loan. Ways of doing this include selling some assets or getting another job. These may be the best option so you should really think about it before digging the debt hole much deeper. Lastly if the hole is already too deep, it may be time to consider bankruptcy or debt settlement options.
