How to Get a Personal Loan with Bad Credit

Finding a personal loan can be a real challenge if your credit is less than perfect. Whether you need the loan to cover an emergency expense, consolidate credit card debt, or finance some home repairs, lenders aren’t really interested in anything else besides the number on your credit score.
Yet despite what feels like a total loss, there is some good news: it is absolutely possible to get a personal loan with bad credit. It will take more than a little hard work on your part, though. Here’s what you can do.

Take Stock of Your Credit History

First things first: don’t just start making loan applications willy-nilly. You need to do a bit of preparation to see what you’re working with, and that means taking a long, hard look at your credit history. You’ll need to know not just your actual credit score but also gain access to your entire credit report; there are many free or trial-based online services to get the information you need.

Pulling your credit history is more than just a walk down memory lane — it’s an opportunity to set the record straight if any of your creditors have made a mistake. If you’ve paid off a loan in full but your credit report says you haven’t, you can be sure that’s bringing your overall credit score down.

Make sure you clear these errors off your record before moving on to the next step: improving your score however you can.

Why Improving Your Credit Rating is Important

So why is improving your credit score so important? While it’s true you don’t need a perfect credit score to get offered a personal loan, it’s always a good idea to improve your credit as much as possible before you begin applying. There are many lenders out there who will take a risk on someone with credit that’s less than perfect, but the terms of these loans are often pretty rough.

An example of this is the amount of interest someone with bad credit can be expected to pay. Interest rates on so-called “bad credit” loans are usually in the stratosphere in order to offset a lender’s risk, and this means the total cost of the loan to you is going to be greater than if you had better credit.

The Most Reliable Credit Repair Methods

Patching up your credit isn’t as difficult as it sounds. It does require diligence and consistency, though — and the process may take quite some time.

One way to improve your credit enough to qualify for a personal loan includes reducing your overall debt. Paying off your existing debt shows lenders you can be trusted to repay any new loans you’re given. If you’re having trouble making minimum payments on the debt you have now, consider contacting your lenders directly and negotiating a new payment plan.

Another way to get a personal loan with bad credit is to find a cosigner to vouch for you. By yourself, you might be too much of a liability to a lender, especially since there’s no way to put up collateral against an unsecured loan. But if you have someone else willing to back you up financially, you’ll be much more likely to secure that personal loan you’re looking for. While not everyone will have friends or family members willing to cosign a loan with you, it is a good option if it’s available.

Watch Out for “Too Good To Be True” Offers

Finally, make sure you don’t get roped into a situation you might regret. If you find a lender that seems to be offering you a large personal loan with terms that seem too good to be true, make sure you take some time to read the fine print before you sign on the dotted line!

Sometimes personal loans can have hidden costs. Beware of lenders charging you “origination fees”, which can tack on additional costs as high as 6 percent of the loan. Also, some lenders will apply a prepayment penalty if you try to pay the loan back early to avoid paying extra interest.

Turn to Match Financial If You Need Help Finding Lenders

Just because you have less than perfect credit doesn’t mean you shouldn’t be able to get a personal loan. If you’re on the hunt for a loan, let Match Financial help you. It’s easy to apply to the lenders we work with. In many cases, you can even expect to receive your cash as quickly as the next day if your application is approved. Don’t let bad credit stand in your way of getting that personal loan you need!