Thursday, May 28, 2020

How to Borrow Money With Bad Credit: 3 Short-Term Cash Options

Around 1 out of 3 Americans have a credit score of lower than 601, which is considered bad credit. If you're one of these Americans, then you'll know how hard it is to get things accomplished, such as rent an apartment or buy a car.

When you fall on hard times, it can be even more difficult, as lenders are hesitant to front you cash. Although there are some legitimate ways to make extra money from home, it’s also not impossible to source some money with low credit. You just have to be smart about it.

If you need to borrow money with bad credit, here are 3 short-term cash options you can try.

1. Ask for an Advance

You might already have a side hustle job in addition to your regular job. But for some, as hard as you try, you still can't make ends meet.

In this case, you might want to ask for an advance at either job. Depending on how generous your employer is, this may be just enough to tide you over to pay for next month's rent or some groceries for the next few weeks.

2. Consider Personal Loans for Credit Score Under 550

There are lenders who specifically have personal loan requirements that are more lenient when it comes to credit scores. This enables people with less than stellar numbers to take out a loan when they need it.

However, do know that this option comes with a caveat; since lenders are taking a bigger risk with you, interest rates of these loans could be slightly higher than with someone with good credit or loan with collateral attached. So make sure you can make your payments on time. Otherwise, you're not only paying late fees and more interest, but you're also risking your credit score dropping even lower.

If you're confident in your repayments, then personal loans can be excellent for building your credit score back up. 

3. Take out a Payday Loan

If you're currently employed, you can also consider getting a payday loan. This is also a type of personal loan and you can get a loan approved basically instantly.

A payday loan is great if you need money quickly and can't wait for a normal loan to be processed. However, do be aware that just like with personal loans for bad credit, the interest rates for payday loans are very high.

Plus, your next paycheck is used to pay the amount back. So if you have plans for your next paycheck, you might end up needing to take out another payday loan to get through the next period until you get more income.

It's Possible to Borrow Money With Bad Credit With These Tips

As you can see, it's definitely possible to borrow money with bad credit. Just remember to be responsible and pay back the amount as soon as you can. Otherwise, you may get into a vicious cycle where you get into more debt since you keep being unable to repay the full amount.

Would you like to get on the road to financial freedom? Then take a look at our Make Money section. 

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