How do you get a personal loan with bad credit?


Quick Answer

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.

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How do you get a personal loan with bad credit?
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Full Answer

  1. 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.

  2. 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.

  3. 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.

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