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How Do I Secure A Personal Loan If I Have Very Poor Credit?

By Edited Jan 5, 2014 4 2

When times get tough you may wonder…How do I secure a personal loan if I have very poor credit? This is not uncommon at all, since plenty of people have been there before. Should know, the even if you have an incredibly bad credit score, you will have some options to use. There are actually several ways you can borrow money, even with a really bad score. Here's how to secure a personal loan if you have very poor credit.

Do You Own Your Car?

If you own your vehicle, you may very well be able to secure a personal car title loan if you have very poor credit. No matter how bad it is, there are many car title lenders that will borrow you money. Many of them advertise guaranteed approval, no matter how bad your score is. There are some pros and cons to car title personal loans that you can secure if you have very poor credit.

Pros: You can borrow money fast if you own your car free and clear. In addition, you can find many online lenders, so you won't have to leave the comfort of home. Many guarantee approval, not matter how bad your score is. You generally need no other form of collateral beyond your car title. If you wonder how you can secure a personal loan if you have very poor credit, this is how to make it happen.

Cons: The fine print will typically state you lose your car if you default. Keep this in mind when you decide you need to secure a personal loan with very poor credit. You may not be able to miss many payments before this happens. You can expect to pay a very high rate of interest when you borrow money this way. There may be high origination fees, and hefty interest hikes and penalties if you miss just one payment. Since you can secure a personal loan if you have very poor credit, you must first consider the risks.

Guaranteed Online Lenders:

If you need more options to secure a personal loan with poor credit, you will have some to consider. Among those to think about, are guaranteed online lenders. You can find several of these internet banks within minutes. Since approval is often guaranteed, you want have to worry about your bad score hurting your chances. Now that you know how to secure a personal loan when you have very poor credit, it may be helpful to consider the good and bad points with these as well.

Pros: Guaranteed online lenders are available online, so the process is generally quick and convenient. This is a positive aspect of these lenders. In addition to convenience, most do not require any collateral, just your signature. You will not have to worry about losing your vehicle. When you need to secure a personal loan, even with very poor credit, it may be possible with this type of lender.

Cons: When you wonder, how do I secure a personal loan if I have very poor credit, you should think about the negative aspects as well. Guaranteed online lenders will charge incredibly high interest, much higher than almost any other lender. While there is no collateral, there will often be a lot of fine print. You may need to submit to electronic payments, which are fine when you keep current, but open the door for more problems if you fall behind. The lender may have contract language that allows them to deduct payments, fees, and penalties if you are just one day late. High risk lenders try to limit the risk on their end, not yours.

Family:

If you would like to know how to secure a personal loan when you have very poor credit, the answer could very well be borrowing money from your parents, or other family and friends. This, just like all other methods, will have some risk. On the flip side, it also has some great benefits. When you need to secure a personal loan when you have very poor credit, this is not a bad option to consider.

Pros: You can get by paying a little smaller rate of interest. In some cases, you may not have to pay any. You may choose to pay a more reasonable amount, perhaps five percent, to help get approved by mom and dad. Mom and dad won't check your FICO score before they give you approval. When you would like to secure a personal loan, but you have very poor credit, mom and dad may be able to help.

Cons: If you miss a payment, you could have issues that go beyond a bad FICO score. It is possible to alienate your family members. When you need to secure a personal loan quick, but you have very poor credit, this is an option to think about carefully. You could have more issues than you would with any other lenders.

Alternatives:

When you wonder, how do I secure a personal loan if I have very poor credit, you should think about some alternatives. Some will work, depending on how bad you situation is. Some of the methods will not be possible. Here's what to do as an alternative, so you don't have to secure a personal loan when you very poor credit.

Insurance Policies: If you have a whole life insurance policy, like the ones people buy for children when they are babies, it may have cash value today. You can cash in your life insurance.

Pawnshops: You can get money really quick at local pawn shops. If you have something to sell, they may be willing to buy it quick. It's an alternative to consider when you need to secure a personal loan, but you have very poor credit.

eBay: Online auctions are a great alternative when you need to secure a personal loan, but your very poor credit score is standing in the way. You can select a short auction to get your money quick this way.

Overtime: If you have the option to make some extra money with overtime, be sure to take full advantage. You can make a lot more money quick this way, so it's a viable alternative when you need to secure a personal loan but you have very poor credit.

Related Articles on Personal Loans

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Comments

Nov 26, 2009 7:34am
Ernie
A great article for people with poor credit
Apr 3, 2013 12:12pm
Knighttrader
Thanks for all these ideas, people often take out a high risk loan and pay over the odds when they have more options than they think, I really hope this article is seen by people who are in a similar position.
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