If you have bad credit and find yourself in a pinch, you might think that you can’t get a loan. While it is more challenging to get a loan with bad credit and even harder to get a good rate, you have options. Here is everything you need to know about what loans you can get with bad credit.
Credit scores are a number between 300 and 850 that reflect your likelihood to repay a loan based on your credit history. Your credit history is a mix of how much you have borrowed in the past and how many loans you’ve taken you.
Banks and other lenders do not want to loan out money that is not likely to be repaid. To protect themselves from lending to people who might not pay their loans back, they make loans more difficult to access for people with low credit scores.
If you have bad credit, be sure you do your research before taking out a loan. You will want to be sure that you can pay your loan back and that the interest rate isn’t too high.
Credit unions are like banks in that they can lend money and allow members to have savings funds, checking accounts, and other investments with them. They are typically local nonprofits rather than national institutions.
If you need money now and own a home, you might also be able to take out a home equity line of credit or HELOC. Often called a second mortgage, you might be able to use your home as collateral to get access to cash.