When you have bad credit, there are a number ways to improve your chances of getting a personal loan. Some of the most common options are offering collateral, working with a credit union, and borrowing from friends or family.
- Offer collateral
Tell the lender that you are willing to pledge something that you own as security for the loan. Understand that if you fail to pay as agreed, the lender has the ability to foreclose on whatever you have pledged. Real estate and automobiles are good examples of commonly accepted collateral.
- Check with credit unions
Visit several credit unions to see if they are willing to offer you a loan. Since they are smaller than banks, they often have more latitude when it comes to considering your personal circumstances. Be prepared to discuss your credit history and offer explanations for past credit problems.
- Call on your friends or family
Think of people you know who might be in a position to lend you money. Discuss your predicament honestly. If you decide to secure a loan in this way, be certain to put the payment terms in writing. These terms should include the interest rate, payment amount and length of payment period.