There ARE loan options available should you have bad credit.

Whether you have good or bad credit, you should be able to apply for a loan to solve your financial situation and give you peace of mind.

Fortunately, there are many options available for those who are seeking loans with bad credit. However, you are will be viewed as a high-risk and the requirements and procedures are therefore slightly different. However, it should not be impossible for you to find an establishment willing to assist you.

You also have the option of improving your credit score, which allows you to apply for another standard loan type instead of loans designed for bad credit applicants. But time is not always on our side and if so, here is a guide to how you can apply for a bad credit loan.

Home Equity Loans

This is probably the most viable option for people with bad credit looking to apply for a loan. You can easily apply for a low-interest, tax-deductible loan, if you have enough equity in your property. This could be seen as a secured loan. So, should you default on your payment, you will be putting your property in jeopardy. Luckily, this is avoidable by simply holding to your repayments.

If you are serious about repaying your loan and you have a reliable income, it is probably your most inexpensive option to get a loan. Many traditional and alternative lenders will be willing to help you if you can secure the loan with your home equity.

Credit Unions Loans

Similarly to banks, credit unions are owned by its members who bear something in common. Whether it be industry-related or the same geographical area for example, it is another solution should you wish to apply for a loan with bad credit. Usually, credit unions are non-profit organisations that offer lower fees to its members.

This is an option you can look into before you look elsewhere to apply for a loan.

Peer-to-Peer Loans

Here is another viable solution for individuals who wish to apply for a loan with bad credit. It is a form of lending that has been around since about 2005 and seems to be growing in popularity. You will find peer to peer loans on an online platform, from which you borrow from an individual as oppose to an institution. The process allows you to pay low-interest rates and the investors earn high-interest rates, making it viable for both parties.

Simply find a peer to peer lending network that suits your needs as there are many online peer to peer lenders available. You will be required to list your loan and the amount you wish to borrow including the reason you wish to loan the amount indicated. Investors then review these loan listings and choose who they wish to loan to. Investors screen the applicants that they are considering, which do include credit checks. However, an investor might be more lenient and grant you the loan, regardless of your bad credit.


If you have a family member or friend with good credit, they might be willing to co-sign for you, which is another nifty solution to your financial issue. If someone is fully aware of your situation and believes you will repay the loan, they might be more than willing to co-sign for you.

You should always keep in mind that should you default on payments, the lender is entitled to claim the outstanding fees from the person who co-signed. To avoid tarnished relationships, you should avoid defaulting on the repayment at all costs.

The payment history and status will reflect on the both parties’ credit record. All these details should be disclosed to the person who is prepared to co-sign for you.

Loans from a family member or friend

This should perhaps be one of your first option if you are in need of money but have bad credit. Lenders take a risk by loaning money to high-risk individuals and one can therefore understand that they often reject these types of applications.

However, a friend or family member might still be very keen to help you out of your financial difficulty. This might also be your most cost-effective option as often family members will charge little or no interest on loans. You can always draw-up a written agreement to ensure both parties are satisfied with the arrangement made.

It should be a relief to know that no matter what your current credit status is that there is an option for you to solve your financial situations. Loan lenders are there to assist you and will always try to do so.

If none of these options suit you, you can always opt for improving your credit score and then applying for a loan at a bank or alternative lender. A quick online search will give you a host of online loan lenders ready to assist you.