Is it Possible to Get a Personal Loan if I Have Bad Credit?
A personal loan can come in handy when you find yourself in need of money for emergency expenses, debt consolidation, and more. This has led people to ask if they can get a personal loan if they have bad credit.
Getting a personal loan with a subprime (bad) credit or zero credit history can be challenging, but it is possible. This is because many lenders and financial institutions prefer to work with people with good or excellent credit scores or a proven track record of keeping up with payments.
Although challenging, getting a personal loan with bad credit can happen if you find the right lender to work with. And that’s where Max CashⓇ comes in! We may be able to connect qualified borrowers to the loan option they are searching for.5
This article will delve into how personal loans work and how you can get a personal loan with your not-so-perfect credit score. If you have any questions about personal loans, give Max Cash a call at 855-207-9052 today!5
How Personal Loans Work
Personal loans are a type of unsecured loan that people can use for a variety of purposes, such as debt consolidation, home improvements, medical expenses, weddings, vacations, and more.
Unlike secured loans, which are backed by collateral (like a car or a house), personal loans are typically granted based on your creditworthiness and ability to repay the funding.5
These loan options typically involve the following if you are applying for a personal loan online:5
- Initial Inquiry (Online or Over the Phone)
- Submission of Documents (Proof of Income, Valid, Government-Issued ID, etc.)
- Sign the Electronic Contract and Receive the Funding (If Approved)5
- Repayment Process According to Agreed-Upon Terms (Typically in Equal Installments Over a Set Period of Time)4
Understanding the Impact of Bad Credit
Before going into how to get a personal loan if you have bad credit, it is essential to get a proper understanding of what bad credit means and its impact on your finances.
The universal credit score numerically ranges from 300 to 850. To dive further, here’s a closer look at how credit scores are measured:
Using FICO Score
- 300 to 579 = Very poor or bad
- 580 – 669 = Fair
- 670 – 739 = Good
- 740 – 799 = Very good
- 800 – 850 = Excellent
Using VantageScore
- 300 – 499 = Very poor or bad
- 500 – 600 = Poor
- 601 – 660 = Fair
- 661 – 780 = Good
- 781 – 850 = Excellent
Typically, credit scores lower than 670 are considered to be bad credit. A bad credit score can result from late payments, high credit card balances, a history of bankruptcy, or other financial setbacks.
This can cast a long shadow over various aspects of your financial and personal life, influencing your ability to secure loans, rent a home, obtain favorable insurance rates, and even impact your mental well-being.
Before you apply for a personal loan, it is advisable to work on your credit history and make sure you pay your bills on time each month! That is one of the best ways to ensure that your credit is positively built up.
How to Get a Personal Loan with Bad Credit
Below you will find more information about how to get a personal loan with bad credit:5
- Know your Financial Situation
Although you might already know your financial situation, taking a closer look before applying for a personal loan is essential. Take a good look and clearly understand your monthly income, expenses, and debt obligations. This assessment proves essential as it helps you determine how much loan you can take and repay.
- Research Lenders
When you have subprime credit, not all lenders will be willing to lend money to you. However, some lenders or financial institutions specialize in offering loans to people with subprime credit scores. Research these options thoroughly to find lenders who are more likely to consider your inquiry. Or, instead of researching on your own, you can reach out to Max Cash and let our team discuss your available options with you!5
- Shop Around for the Most Ideal Terms for Your Situation
During your research for suitable lenders, also check out their terms. Do not settle for the first lender who decides to give you an offer. This is because their terms might be exorbitant and out of your budget. Therefore, when shopping for lenders, shop for the most ideal terms you can qualify for. Just as you compare lenders, compare the loan terms, which will help you find the most favorable loan option.4
Note: Consider factors such as interest rates, repayment terms, and associated fees.4
- Harness the Power of a Co-Signer
If getting a personal loan on your own due to your bad credit is challenging, you could get the help of a family, friend, colleague, or someone with strong credit to be a co-signer.
This is a strategic and smart option, as your co-signer assumes joint responsibility for the loan, pledging to repay the debt should you encounter difficulties.
This approach substantially increases the likelihood of getting your loan approved. It could also lead to you having more favorable loan terms due to the co-signers solid credit score.4 5
- Apply
After you have done the aforementioned steps, the next step is to get your documents ready to inquire about a personal loan. Although the exact documents you will need to have on hand will depend on your lender and whether or not you have a co-signer, you can expect to need things like a driver’s license, proof of income/address, and other important documents to verify your information. Once you have the documents ready, it is time to apply and discover if you are eligible for the quick funding you need.5
What are Some Tips to Qualify for Personal Loans with Bad Credit Scores?
Here are steps to take to qualify for personal loans and increase your chances of approval with bad credit
- Check your Credit
Although you might already know or have an idea of your credit score, checking again won’t hurt. Checking your credit report could help you spot errors, and fixing them could positively affect your score.
- Pre-qualify
Did you know that you can typically prequalify for a loan with no commitment? This process can help you determine if your loan will be approved and what your terms could be if you decide to proceed with your loan request. During the prequalification process, you will be able to see the loan terms, interest rates, and more. This will help you shop around and get the best lender.4 5
- Add a Collateral
There is a high chance of you getting a personal loan with bad credit if you add collateral. Adding collateral makes this a secured personal loan.
Apply for a Personal Loan Online or Over the Phone Today with Max Cash
Obtaining a personal loan with bad credit might pose challenges, but it’s not impossible. With the help of Max Cash, eligible applicants can get connected to the financial help they need with no hassle. We are available 7 days a week to take your call, so call 855-207-9052 now to learn more about personal loans!5
