7 Tips for Borrowing Money with Bad Credit

When you are struggling financially you may find that it is difficult to borrow money. This is especially true if you have bad, or no credit to speak of. Having a low credit score does not mean that you are unable to borrow money, it just makes it a little more challenging.

1. Ask family and friends

For many, this is not an ideal situation. The last thing that you want is to owe your family or friends money. It can also be embarrassing to do this so you should avoid this as best you can. If you do go this route it is best to lay down how and when you will be able to pay these people back. Also, you will need to keep an exact accounting of the money that you borrow.

2. Borrow with your car

Also known as a car title loan, this is a way to borrow money that is becoming more and more common. You can put your car up as collateral on a loan. This can be a great way to get the money that you need right now in your pocket and still own your car. You should make sure that you do your research and ensure that you have done everything that you can to ensure you are dealing with a reputable company.

3. Have someone co-sign the loan

When you have someone to co-sign the loan you are demonstrating to the financial institution that you have someone with good credit in your corner who believes that you will be able to repay the loan on time. The co-signer is taking some responsibility for the loan repayments as the history of the payments will appear on their credit reports. For this to work you will need someone who trusts you a great deal and is also willing to put their own financial future in jeopardy. This can be a big ask, you will also need for them to have excellent credit in the first place.

4. Go to a credit union

These are similar to banks and offer personal loans. The major difference is that a credit union is owned by the members of it. This means that any profit that is made is reinvested back into the credit union. They are often able to offer much lower interest rates than banks. This may allow you to receive a loan from them with a poorer credit score.

5. A secured loan against your home

This may be an option for you if you own your home and it has some equity in it. This is where you put your home up for collateral on the loan. This has been a great way for many to find their way out of debt without too many headaches.

6. High-interest loans

These are sometimes called payday loans or something similar. There are many companies that offer loans that seem too good to be true. You will need to examine the fine print to make sure that you are not biting off more than you can chew. The interest rates might be far too high for you to handle.

7. Improve your credit score

This may sound like it’s an impossible challenge but there are ways that you can look to recovering from your current financial situation. You can speak to free credit advice services that may be able to offer you some really great solutions that will help in both the short and long term. It is best to focus on one source of debt and get that cleared as quickly as possible.

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