Where can I get a loan with bad credit?

You may get rejected for a loan by a traditional bank if you have bad credit. So, where do you get a loan with bad credit? There are thousands of bad credit loans with no credit check lenders who are willing to help you!

There are some credit products that are directly available to people in your situation, but they come at a fairly high price. Despite all this, you should not despair.

If you try hard, you can secure finance that matches your needs. You simply need some practical advice on what to do and what mistakes to avoid. 

What are bad credit loans?

The notion of bad credit is quite relative. What may be bad credit to one lender may be perfectly acceptable for another. Given this, it pays off to research as many lenders and credit products as possible. Bad credit loans are designed to help people with bad credit get the financing that they need. The loan criteria is slightly different; accepting a less-than-perfect credit score.

You should act cautiously, however. The most effective strategy is to apply to several lenders within a week or two. That way, the applications will not affect your credit record adversely. Just remember that it is best to apply only to registered lenders.

You should stay away from loan sharks that will approve you right away without even looking at your credit record but will charge very high interest rates and fees that may be impossible to pay.

How to get a loan with bad credit, fast!

It's easy to apply for an online bad credit loan. Simply complete the application form and gain access to lenders and products specifically designed for people who have bad credit or no credit. Bad credit loans with no credit check mean that your credit status is not part of the loan approval criteria. Oftentimes, these loans are secured with collateral.

You should not assume anything about your creditworthiness. Request your credit report and read it with great care. If you notice any errors, you have to request their correction immediately. It may turn out that you stand better chances of getting a loan than you think.

Other loan types for bad credit

There are alternative ways for obtaining finance that can be quite useful to people who have bad credit.

Credit Union Loans

Credit unions are traditionally more flexible than commercial banks when it comes to extending loans to people with bad credit. You can expect a greater amount of personal understanding. The loan officer will take into account your personal circumstances as well as your credit history. You will have the opportunity to secure a favourable deal given your situation.

Peer-to-peer loans

Peer-to-peer lending has been around for quite some time in New Zealand. Peer-to-peer or P2P loans are available from many individual lenders. These are private persons who are willing and able to provide cash to others for earning a profit. They are a lot more flexible than banks or other more traditional lenders. They do not run lengthy assessment procedures. You just have to ensure that you will be able to repay the loan.

Loans from family and friends

If you plan to borrow money from a person, you may consider a family member or a friend rather than a person offering P2P loans who you do not know. You will have a very good chance of getting the cash that you need. You just have to ensure that the lender will feel at ease about giving cash to you. You should draw a standard loan agreement and sign it together with the lender. It is better if the loan amount is transferred from the lender's account to yours compared to getting cash.

In case your family and friends cannot afford to lend you the money which you need, they can help you out as co-signers. A co-signer with a clean credit record and a steady employment income will give you very high chances of securing a loan from a bank. You and your co-signer will have joint responsibility for repaying the loan so the risk for the lender will be lower.

Secured Bad credit loans

Another strategy for getting a loan if you have bad credit is to place an asset as collateral. The collateral is used for securing the personal loan. In case you fail to repay it, the lender will have the right to repossess the asset. In this way, the risk for the lender is lower so you will have better chances of getting approved.

Furthermore, the interest rates on secured loans are lower than those on unsecured ones so you may be able to save money as well. This solution is effective, but you have to assess your ability to repay the loan and the risk of losing your asset carefully.

Are bad credit loans more expensive?

When you take out a bad credit loan, you have to check the total cost and the size of the monthly payments. You have to ensure that you will have sufficient income left after paying the monthly installment. If the disposable income is not sufficient for covering your living costs, then you should look for another option. You have to avoid getting into more debt.