How Can I Borrow Money with Bad Credit?

Anelle Valdes
Anelle Valdes
a person looks at their poor credit score on a computer screen

Good credit has to start somewhere, and it’s possible to secure your financial situation even when that starting place is right in the middle of a poor credit score. Many people consider bad credit loans when an emergency comes up, but they can also come in handy for those who are already buried in credit card debt. Since bad credit loans tend to have lower interest rates than credit cards or payday loans, they can offer some relief when you don’t have a better option. 

We’ll walk you through how bad credit is established and how you can use what you have now to secure a bad credit loan with reasonable interest rates.

Defining Bad Credit

Credit is generally measured by your FICO score, which is in turn managed by one (or more) of three major credit bureaus. Your payment history has the greatest weight on your score and is followed by your credit utilization ratio (the amount of money you owe versus the credit limit allowed). These two factors can fluctuate greatly and influence your score relatively quickly, which is why consolidating your debts with a personal loan can help manage late payments currently hurting your FICO score.

The FICO score is generally broken down into four categories: Excellent, Good, Fair and Bad. While these categories tend to have small differences in the way they’re determined from creditor to creditor, a general rule of thumb places bad credit around 300 – 668. Once you’re in that range, it can be difficult to find loans that don’t have a predatory interest rate.

Getting a Loan with a 500 or Lower Credit Score

Finding a bank loan can be extremely difficult when your credit score has hit 500 or lower. While there are many other options available, the type of loan you choose can affect the interest rate, how quickly your loan application is approved, and how long you need to wait before receiving money. For a fast approval with low credit, you can typically look into these options online or at brick and mortar locations:

  • Unsecured Personal Loans: Depending on the lender and the borrower, these loans can range from a few hundred to thousands of dollars. They’re unsecured because they don’t borrow against any collateral in the case of a loan being unable to be repaid.
  • Payday Loans: Short-term, typically small loans ($200-$2000) that help you cover immediate expenses before you get your next paycheck. 
  • Car Title Loans: These are secured loans that use a borrower’s car as collateral for the loan amount. These typically have a period of 30 days for repayment.

Which Loan Company is Best for Bad Credit?

Even when looking for quick cash to cover an emergency, it’s important to do your research so you can find the best rates for your area. This process has become extremely simple with internet searches, but in general, the critical details you should look for are:

Guaranteed Money Quickly: Some loan services have approval rates and funds available within 24 hours. Others may take up to a week, so plan accordingly for your financial needs.

Reliable Business: Loans should have clear and easy-to-understand terms so you know exactly what you’re getting into after you apply. Look for clearly laid out APRs and fee policies so you don’t get hit with anything unexpectedly.

Helpful Loan Managers: Great service is more than a pleasant experience—it also means you’ll be able to have your questions answered whenever you have them so you can receive the advice and services you need.

At Wise Loan, we value our clients and provide them with reliable services and turnaround rates for loan applications. If you’re curious about what you can get for your current situation, take a look at our online application today.

The recommendations contained in this article are designed for informational purposes only.  Essential Lending DBA Wise Loan does not guarantee the accuracy of the information provided in this article; is not responsible for any errors, omissions, or misrepresentations; and is not responsible for the consequences of any decisions or actions taken as a result of the information provided above.

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