According to some research, 16% of Americans have a bad credit score. But what happens if you have a bad credit score and need cash quickly?
Thankfully, you can still take out an emergency loan, even with bad credit. But what are your options?
Keep reading to discover how to get an emergency loan for bad credit.
First, you may want to consider applying for a credit union payday loan. These payday loans don’t have conditions that are as tight when compared to traditional loans.
However, you may not be able to take out large amounts of money, and the loan terms are shorter, generally between one month to a year. The interest rates can vary, but they’re typically higher than other loans.
These loans can be riskier than a standard loan, so you should only consider this option if none of the other options work.
Online lenders will run all of their operations over the Internet, so you won’t be able to apply for one in a brick-and-mortar bank. Because of this, they have lower overhead costs, which means that they can offer more bad-credit loans than a traditional bank would.
However, the interest rates and repayment terms can vary much more. Some of them also charge interest rates that are over 100%, so if you borrow from one of those online lenders, pay it back as soon as possible.
However, if you want to afford those high fees, choose a vendor that will help you find multiple different online lenders.
There are some credit cards out there that you can get approved for even if you have bad credit. This can sometimes be better than taking out a loan, depending on how much money you need.
You might not get a large credit line in the beginning, but this amount will depend on how much debt you already have and what your income is like. Even if you only are making a few hundred dollars a month, you might be approved for a small line.
The bank will also determine what type of interest rate you qualify for. This can also be a great way to help you build credit in the long run.
While some banks might take a few business days to mail you the physical card, they might be able to send you a virtual number that you can use in the meantime. You can add it to your digital wallet and use it for emergencies.
If you don’t want to open a credit card, you can also ask for someone to cosign on your loan. This is when you have a friend or family member sign the loan with you. This basically says that even if you can’t pay the loan back, the cosigner will have to pay it back.
However, the people who cosign don’t get the money. Depending on their credit score, you could also get a better interest rate than you would normally. The point of cosigners is to help you get your credit score back on track.
Keep in mind that if you do have a cosigner, you will need to pay the loan back according to the schedule. If you don’t, the lender will hold the cosigner responsible for paying back your loan, which could hurt your relationships.
But because of the lower interest rate, the repayments should be smaller, which makes it more manageable.
If you’re part of a credit union, you could have access to an emergency loan even with bad credit. Credit unions are nonprofit organizations. The members own the credit unions, so instead of raising profits for third-party shareholders, credit unions use the revenue to offer lower interest rates for their members.
This is a great payday loan alternative, but the loans are often smaller in amount. They have a short repayment term as well, between one to six months. However, there is a maximum interest rate that credit unions can charge, which is normally under 30%.
You’re also more likely to get approved for a credit union loan if you’re a member of the credit union. However, you need to be a member of that union for at least one month before you can apply for any of the loans.
So, this is only an option for emergency cash if you are already a member of that credit union.
Nonprofit organizations offer various loans as well for people who are in need. There are many charities that are designed to help people pay their bills and get emergency cash.
You might need to meet some qualifications in order to qualify for the loans, like face eviction by not being able to meet your rent or mortgage payments.
Lastly, you could consider taking out a personal loan, which is an installment loan. These loans are issued by credit unions, online lenders, and banks. This type of loan can be unsecured or secured.
If you don’t have a good credit score, you might want to try to get a secured loan. This way, you’ll put up collateral, like a home or vehicle, which the lender can take if you don’t end up repaying the loan.
These are only a few ways to get an emergency loan for bad credit, but there are still other options available as well.
We know that getting a loan with bad credit can be very difficult, which is why we’re here to help make it easier for you.
Check out our website today to get approved for a loan and receive funds within the next day.