Personal Loans for Bad Credit

March 4, 2023 | High Risk Merchant Account | Dustin

Personal loans for bad credit are more difficult to obtain than an equity loan with good credit, but there are banks who are willing to help. If you have bad credit and are in need of a loan, be sure to research various companies and apply to their bad credit loan program to see if you qualify.

If you’re looking to get a personal loan and your credit score is less than 700, you should shop for alternative lending options outside of standard banks. Many banks don’t want to help individuals with bad credit because they see it as an increased risk. However, with steady income and a consistent business or your credit score can be ignored completely.

Get A Small Personal Loan with Bad Credit

Depending on the size of the loan you require, you may qualify for a small personal loan with bad credit. The amount is key when it comes to lenders working with you to share the risk of debt. A good lender takes into consideration your personal financial situation and accounts for multiple variables outside of your credit score.

A small personal loan can be anywhere from $5,000 – $50,000 depending on the equity that’s in place to hedge the risk. So be sure to discuss why you require a small loan, and how you plan on making payments over time.

Moreover, you should shop around for the best interest rates and repayment options for your personal loan. If you have bad credit, you’ll want to use this as an opportunity to increase your credit score as your loan is paid off.

What is the easiest type of loan to get with bad credit?

One of the easiest types of loans to get with bad credit is a small personal loan. Personal loans are made on a case-by-case basis, and lenders consider your individual requirements in the underwriting process. For example, if you require a lower interest rate in order to keep payments down, a good lender will work with you to ensure your rates are competitive and minimal.

It’s also much easier to get qualified for a personal loan because anyone can become a personal lender. Most lenders of this type are private entities who are eager to lend money in order to extend their debt portfolio. Investment companies, angel investors, and real estate entrepreneurs are all types of business entities who look to find ways to create debt in order to make wealth later on.

Direct Lenders for Bad Credit Personal Loans

Direct lenders are individuals or companies who transact directly with the people they are creating a loan for. Having a direct lender for a bad credit personal loan is your best way to stay connected to the entity who’s issuing debt for you. Keep in mind, your lender is winning from the deal as well. As long as you make steady payment, the interest payment they make becomes a steady revenue source for them to grow.

Bad credit can sometimes seem to have a snowball effect on business and personal growth. If you’re trying to build your credit you’ll have to incur some form of debt. This is because your credit score is a qualitative measurement of your history of debt. It takes into account the money you owe, the amount of money you make, and most importantly your payment history.

Who will let me borrow money with bad credit?

Banks and private lenders will both let you borrow money with bad credit. These entities determine how bad your credit is by looking at the different companies that make the scores. Experian, Transunion, and Equifax all have different methods for computing your credit score. So even if you think you have bad credit, it may just be that one of those entities is giving undue weight to an outstanding transaction.

Some lenders look past student loans, hospital bills, or other types of debt that may lower your credit score, but not impact your ability to pay a new loan. For example, if you’re a doctor and have $250,000 worth of student loans from med school, it may appear as a huge mark on your credit score. However, a private lender can look at your future earning potential and make the right call when it comes to giving you a loan.