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Best Ways to Get A Personal Loan with Bad Credit

date September 17, 2020 time 5 min read 691 views

Having a low credit score doesn’t need to affect your ability to get a personal loan. Thanks to developments in P2P lending, you can now get a personal loan with bad credit without extortionate interest rates. Today, we’ll explore different ways to get a personal loan with bad credit and break down why P2P lending is the future of lending and borrowing.

Have you been denied a personal loan because of bad credit?

Being held back from your financial goals by a low credit score is frustrating. It hardly seems fair that a run of bad luck can affect your credit for the rest of your life and prevent you from getting loans.

Fortunately, today there are still many loan options available to you. Here are some of the most reliable ways to get a personal loan with bad credit.

Here’s how to get a quick, same-day loan even with bad credit
Here’s how to get a quick, same-day loan even with bad credit (source: pxfuel.com)

Can I get a personal loan with bad credit? 

Yes. But we’ll get into that in a minute.

While you can still get a personal loan, you should still be actively working to increase your credit score.

People with bad credit have a harder time getting apartments, insurance premiums, certain jobs, and personal loans.

Before looking into emergency bad credit options, there are a few simple things you can do to improve your credit score.

1. Make sure your details are correct

If your credit score has recently taken a hit and you haven’t made a late payment, it could be that the details on your file are incorrect. Something as simple as the wrong address on your file can cause your credit score to take a hit. Improving your credit score may be as simple as checking the details and reporting incorrect information to get it fixed.

2. Register on the electoral roll

Did you know that registering on the electoral roll increases your chances of your personal loan getting approved? When you register to vote, your address is automatically recorded in your report. 

As previously mentioned, having the correct address recorded and confirmed gives you good credit. This is because the data quickly helps lenders verify your details. Registering on the electoral roll subsequently saves you and the lender time while boosting your credit score.

3. Keep your credit utilization under 25%

Your credit utilization is the percentage of your available credit limit that you use. For example, if you have a credit limit of $1,000 and you use $500, your credit utilization is 50%.

Using a small percentage of your credit limit will increase your credit score. The less borrowed money you spend, the more likely lenders are to give you a personal loan. If you can keep your credit utilization below 25%, you will see an improvement in your credit score.

Lower your credit utilization score by learning how to manage money and you should see a long term improvement in your credit score.

Now, let’s have a look at what you came for.

You need an alternative to Payday loans if you have bad credit. Get better loans online
You need an alternative to Payday loans if you have bad credit. Get better loans online
(source: picpedia.com)

How to get a personal loan with bad credit

When looking for platforms that allow you to get personal loans with a low credit score, there are ways you can secure your loan without devastatingly high-interest rates.

1. Don’t settle for a high rate

Having a low credit score makes it difficult to find a low-interest rate. People with an excellent credit score typically pay back their loans with an average APR of 13.9%. Having a bad credit score typically means you pay double this. Still, you should steer clear of high-interest loans and opt for low rate loans when possible.

If you cannot find a low-rate loan, you can get a personal loan even with bad credit by using collateral.

2. Pay debts off as quickly as possible

If you do take out a personal loan, it is best to pay it off as quickly as possible. This increases your credit score and proves to lenders that you will pay them back. Paying loans back quickly also helps you avoid accumulating interest.

3. Secure your loans with collateral

If your credit score is too low to get a low rate loan, you can get a loan for bad credit with collateral. When loan companies are offered a tangible asset as collateral, the risk for the lender is lowered. Assets can include anything from office equipment to commercial real estate or personal inventory to digital assets like cryptocurrencies.

The advantage of securing your loans with collateral is that you get a much better interest rate.

You can find out more about how to find the best online loans on our blog.

Collateral loans are the surest way to get a low rate loan even with bad credit
Collateral loans are the surest way to get a low rate loan even with bad credit
(source: pxhere.com)

Try P2P lending for the best loans with bad credit

P2P lending platforms are a new credit option online that may allow you to take out loans without a high credit score.

What is P2P lending?

P2P lending (peer-to-peer lending) is a way for people to invest and borrow money online without a traditional financial institution acting as a middleman. Rather than borrowing from a company, you borrow from someone who is looking to diversify their investment portfolio.

Why is P2P lending a good option if I have a low credit score?

Peer to peer lenders are in direct competition with the traditional loan market. Because they usually don’t have the insurance backing or years of establishment as banks, they need to do something to remain competitive. Usually they try to offer more lenient terms and rates to borrowers to gain their edge.

The downside of P2P lending

While many platforms let you get a loan with a lower credit score, many still assess your creditworthiness through similar methods as the banks. This means that if you have a bad credit score, you may have to still search quite a bit for favorable loan terms on P2P platforms.

Try peer to peer lending if you have bad credit and want to avoid invasive credit checks
Try peer to peer lending if you have bad credit and want to avoid invasive credit checks (source: flickr.com)

Get a loan with any credit score on MyConstant

At MyConstant, we understand that often, bad credit is a product of unforeseen circumstances. We aim to take the trust out of lending and we offer the best rates because of it.

On our platform, you can use cryptocurrency as collateral to secure a low-risk personal loan with bad credit and no material assets. We also offer features like:

  • Low-interest rates starting at just 6% APR.
  • Instant matching time for loans.
  • Secure storage for your collateral

Bad credit doesn’t need to prevent you from taking out the personal loan you need. Apply for a personal loan with MyConstant today.

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George Schooling

George Schooling

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