4 Ways to Get a Loan with Bad Credit

You may, or may not, know if you have bad credit. Maybe you tried to get a loan with bad credit and came up short. You’re not alone! In fact, according to the National Foundation for Credit Counseling, 60% of Americans haven’t checked their score in more than a year. If you haven’t checked your credit score or report in over a year, you may be avoiding the inevitable, or afraid of what it will show. Do you let payments slip through the cracks? Are you only paying the minimum on your credit cards? Certain habits may indicate a low credit score.

You will never know for sure if you have bad credit until you check. If you have already done the necessary research and determined that your credit score is on the low end, don’t hesitate working to right the wrongs. In the interim, if you need a loan or other form of credit to help you out, continue reading for our tips. The CGS Team is sharing 4 ideas for you to get a loan with bad credit. It is still possible to open new forms of credit if you have a low credit score.

Here are 4 ways you can get a loan with bad credit…

#1 Start with a Credit Union

If you are already a member of a credit union, start there when looking for a loan. Even if you have bad credit, credit unions are always actively looking for borrowers. Unlike regular banks, credit unions are nonprofit institutions. This means they can pass along profits to their members in the form of lower borrower interest rates, minimal fees, and higher savings account rates.

Since credit unions are more community-based, they may be willing to look past your bad credit history and low score and approve you for a loan based on your character. There are no guarantees with this route, but your chances of being approved with a low credit score are much higher with credit unions than regular banks

#2 Get a Co-Signer

According to Debt.org, “With a qualified co-signer, the lender will set the loan terms based on the credit score of the person with good credit, who will then be equally responsible for repayment. All payment information will be recorded on both yours and your co-signer’s credit reports, so if you default on the loan, or you’re late with payments, you will severely damage your co-signer’s credit score. However, if you make timely payments, your own score will improve, making it easier to obtain future loans without a co-signer.”

Not only can getting a loan with a co-signer increase your chances of approval, if you do pay the loan back timely, your score can go up because of it. For most young people, co-signers are often in the form of family members, spouses, or significant others. You will want to ensure you are fully capable of affording the loan on your own, regardless of what your credit shows. You don’t want to be in a situation where you can’t pay the loan back and it falls on your co-signer. That could hurt your relationship.

#3 Secured Loans

If personal loans or any other loan just don’t seem to be an option because your credit is so bad, your last option could be a secured loan. Secured loans are loans taken out against an asset you own. For example, a home, a car, stocks, or savings could be used as collateral for your secured loan. Typically, the lender will offer you the money at the same market value of your asset. If you put your car up for collateral and your car is only worth $5,000, you may be approved for a secured loan of $5000.

Secured loans could be a great way to get the money you need right away, but they do have a downside. If you fail to pay the secured loan back on time, the lender can take your asset as form of payment. This could result in you losing your home, car, or any other valuable item you put up as collateral. Think wisely before going this route, and make sure you can pay the loan back timely.

#4 Ask Friends or Family

Depending on your relationships with your friends or family, this may be a first option or a last option. Borrowing money from friends or family can be lucrative. They may not require you pay them back as quickly as a bank. They also may not charge you interest. Similar to the co-signer route, if you fail to pay your friend or family member back, you run the risk of ruining the relationship. If you are on the giving end of a loan to a friend or family member, check out the article The Do’s and Don’ts of Loaning Money.

Related: 3 Hacks to Quickly Raise Your Credit Score


It can be very difficult to get any form of credit when your score is low. If possible, the best option is to work on repairing your credit history and wait out seeking new forms of credit. Have you been in a situation where you couldn’t get a loan? What did you end up doing? Did you have to go the payday loan route? Leave a comment below to share some of your tips and experiences with obtaining credit when your score is bad.

-The CGS Team



1 thought on “4 Ways to Get a Loan with Bad Credit”

  1. If you have bad credit, the first step should be turning it around. However, sometimes you need a loan or to take on more credit. It’s nice to know that there are some options.

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