There will come a time when you might have to deal with some financial issues. And, when you fall short or run out of cash in your pocket or bank account, it might seem like there’s nothing better to do than to borrow money to help you with your sudden expenses. This is especially true if you’re having a hard time obtaining an unsecured loan due to your bad credit rating.
It’s quite inevitable that you’ll need to borrow funds at some point in your life to cover emergency costs or any situation that requires immediate cash–this, even if you have no enough savings and, worse, bad credit rating.
So, if you find yourself in the middle of a financial trouble all of a sudden, here are some personal loans for bad credit of which you can avail to help alleviate your burden:
Ask Help From Family
This is one of the easiest ways to solve your financial trouble in an instant, and without thinking about your poor credit score. In almost all bad situations, your family will be there to help you no matter what happens. They’re the first people you expect to understand your circumstances, and, more often than not, they will not judge you.
Unlike other lending methods, borrowing from a loved one can be the quickest path to getting your much-needed money. When talking to them, you don’t need to file an application form, comply with the requirements, and wait for the approval for a few days. They’ll immediately let you borrow money without hesitations.
However, asking for financial help from your family can also become tricky. When things go wrong and expectations aren’t met, such a transaction can damage an essential relationship. To keep this from happening, communicate openly about the repayment procedures and keep all your emotions out of the equation. This means that you should treat the deal as a business transaction in which you should repay the money you’ve borrowed.
Apply For A Personal Loan
Another way to borrow money during emergencies is to apply for a loan from a reliable lending company. Luckily, you have many options, including personal loans.
Primarily, a personal loan refers to money being borrowed from a bank, online lender, or a credit union, and which should be settled through fixed monthly repayments. It’s also known as an installment loan because it’s given out in a lump sum money, but has to be repaid in installments.
Unfortunately, most personal loans are unsecured loans, so you have to comply with some requirements to complete your application. In most scenarios, these requirements include a good credit rating. If you have a good score, you might have higher chances of getting your loan approved by the lender. Otherwise, you probably have a slim chance of succeeding in your loan application. This is where bad credit loans come to the rescue.
If you have a low credit score or bad credit history, you are, still, qualified to borrow money for emergencies. This type of personal loan doesn’t consider your credit rating as one of the crucial requirements for approval. This means that you have nothing to worry anymore because it’s still possible to get a personal loan even with a poor credit score. If you’re living in or near Ontario, you may apply for bad credit loans Ontario if you’re in dire need of money to cover emergency costs.
Avail Of A Credit Card Advance
When there’s an emergency and you don’t know where or who to turn to, borrowing money through a credit card advance makes a lot of sense. Typically, most credit card companies provide cash advances to users through withdrawals from the ATM or checks. Since they can be likened to a short-term loan, credit card providers will more likely charge you with a transaction fee and a higher interest rate.
But, despite this high-interest rate, a credit card advance allows you to cover an expense immediately, which is quite impossible in other methods of borrowing money. That’s because you don’t need to rely on your credit score before you can qualify for the advance. So, even if you have poor credit rating, you can still make use of it as a financing option.
Use A Valuable Item As A Collateral To Borrow Money From A Pawn Shop
Another straightforward way to get instant money for emergencies is to go to a pawn shop and pledge a valuable item in exchange for some cash. It’s somehow similar to a loan because you need to use an expensive item, like a piece of jewelry, mobile phone, or anything with value, as collateral for the money you’ll borrow from the pawn shop.
For instance, the shop will take a look at your item, assess its value, and keep it on hand until you repay them with the loan. If you’re unable to repay the money, they’ll keep the item for good and sell it in an auction sale.
The good thing about this method is that it doesn’t require an application process or a credit check before you can be eligible. This means having a poor credit score will not matter at all. Just look for a reliable pawn shop in your area and pledge your item so you can borrow money and resolve your predicament instant.
Try Out Peer-To-Peer Lending
If you’re looking for a straightforward way of obtaining cash for emergencies, you should consider using peer-to-peer lending. It refers to direct borrowing of money from anyone through online platforms that match potential borrowers with lenders. Like other loans available in the market, P2P lending usually offers unsecured loans in which you should comply with specific requirements before you can qualify for the loan.
Moreover, using P2P lending can be a good financing option because it’s a straightforward process. This means that all transactions are done in an online platform where you complete an application. Once you’re done, the platform will check your application, including your credit rating.
When your application is approved, you’ll receive options from the lender, including your assigned interest rates. Then, you need to check their suggestions and pick one from those. Although most P2P lending requires a good credit score, it’s still a good option for those with bad ratings because the lenders have much leeway to adjust the standards and accommodate your financial needs.
However, you should be mindful of your monthly interest payments, as well as the principal amount upon maturity. Hence, whether you have a good or bad credit score, you can make use of this form of direct lending as your reliable resource of money in times of emergencies.
Use Your Vehicle Title As Collateral To Secure A Loan
If you own a car, you can use its title as collateral to borrow money from a lender. This method is also known as a title loan. So, if you’re left with no other option, you can take advantage of this process to get some funds to cover your emergencies. This type of loan is popular nowadays, even for immediate cash needs. That’s because your credit rating isn’t necessary for determining your qualification, and your application can be approved quickly.
On the other hand, when you’re making use of it, you should know that your lender will put a lien on your car title, allowing them to temporarily keep the hard copy of your title in exchange for the amount of money you borrow. However, if you’re unable to repay the loan within the agreed date and terms, there’s a chance that your car will be taken from you permanently. Having said that, it’s essential to consider this option carefully before you push through.
Get A Home Equity Line Of Credit
You can also fund an unexpected expense by getting a home equity line of credit. This means that you have the option to use your home as collateral when borrowing money. While it’s easy to qualify for this, plus the interest rates are low since it doesn’t require a bad credit score, this should also be taken seriously because there’s a risk of foreclosure if you’re unable to repay the loan.
But, so long as you understand how this option works, it can still be an ideal way of borrowing money for emergencies.
Take A Loan From Your Retirement Account
If you’ve already exhausted all your options, but to no avail, then, maybe, it’s time to use the money you’ve invested in your retirement accounts, such as 401(k) or IRA (Individual Retirement Account). This means that you’re allowed to borrow money from these accounts, provided you have to pay it back within a specific period to avoid penalties.
Also, unlike applying for personal loans, taking a loan from your retirement account usually comes with much lower interest rates and doesn’t affect your credit score. But, since it’s an investment fund for your future, using them for emergencies should only be done in extreme and hopeless cases. That way, you’ll never have to compromise your financial security once you retire.
Final Takeaway
Indeed, life has its way of testing how strong you are when it comes to handling some financial problems. Although these things usually come when you least expect them, you should remember that there’s always a rainbow after the rain.
Therefore, if you’re stuck in an emergency with no funds to use and a bad credit score that’s making it hard for you to secure a loan, keep the tips mentioned above, and you’re definitely on your way to resolving your money problem in no time. Given the options you have in your hands, make sure not to rush yourself into choosing the right one for your needs. Also, take the time to weigh the pros and cons of each option to get the most out of your choice.
