15 Ways To Get A Loan With A Bad Credit

This article contains 15 ways to get a loan with a bad credit in 2022. Let’s get started.


Credit scores are very important to business owners, especially those looking for loans. Credit scores are numbers falling between 300-850 with 700 and above being regarded as good credit scores. 

Your credit score is a representation of your business or personal successes as it tells your lender if you are credible enough to pay back your loan(especially on time).

A credit score is usually based on a series of financial data like :

1. Amount currently owed
2.  previous payment history
3.  length of credit history,
4. New credit 
5. Credit utilization and so on. 

Your financial data is usually gathered by credit-reporting agencies, also called credit bureaus, and assembled into your credit reports.

The credit score model was created by the Fair Isaac Corporation, also known as FICO, and it is used by financial institutions. While other credit-scoring systems exist, the FICO score is by far the most commonly used. 


A high credit score allows you diverse loan opportunities at low-interest rates.

Bad credit holders find it harder to get loans. Irrespective of your credit score, each lender has its criteria, requirement, and classification. However, credit scores have been generally divided into 5 categories

1. Excellent/ exceptional:

An excellent or exceptional credit score falls between 800-850. People whose credit scores fall between 800 and above are open to diverse loan opportunities.

The lender is assured of the individual’s compliance with repayment rules and so they are hardly rejected and are likely to be offered the best accessible lending terms, entailing the lowest interest rates and fees.

2. Very Good credit score:

A very good credit score ranges between 740-799. They are also regarded as low-risk borrowers alongside the people with an exceptional and good credit score as they show a guarantee of precise compliance to loan rules.

3. Good credit scores:

This category is slightly better than the fair credit score and poor credit score. The good credit score ranges between 670-739.

They have a slightly better chance than those below 670. People with scores in this range are likely to qualify for a large array of loans and credit cards but are likely to be charged interest rates relatively higher than the best available.

4. Fair credit scores:

Scores between 580-669. They are regarded as subprime borrowers. They do not have good loan options and are often charged with higher interest rates.

Read: 10 Business Start-up Loans In 2022

5. Poor credit score: 

Poor credit scores range between 300-579. Several lenders refuse credit applications from people with scores in this range, which could be a result of bankruptcy or other major credit problems.

Credit card applicants with scores in this range may only qualify for a few loan options.

Utilities may require customers with scores in this range to put down hefty security deposits.


While it might be a bit harder to get a loan with bad credit, it is not impossible. Bad credit lenders could also help you build your credit as they report loan payments to the credit bureaus.

Be informed however that your on-time loan payments can also help you build credit.

Even if you can’t qualify for the best loan terms, there are loans for bad credit. There are various means through which you can get a loan with bad credit.


A cosigner is someone who guarantees that your loan payment will not be defaulted, in the course of which if you default, he stands in to pay the debt. A cosigner is also universally known as a “guarantor”.

In other words, a cosigner is a person that consents to stand as your backup repayment source.  In case you are not able to pay your loan, he/she takes responsibility.

Whoever would be standing in as your cosigner should be a trusted acquaintance or relative with good credit scores and a good societal image/reputation. 

Most times a cosigner is required when an individual either has a poor credit score, does not meet the minimum income requirements, has a high debt-to-income ratio, etc.

Lenders see borrowers with bad credit as high-risk borrowers thereby imposing high-interest rates on them but with credible cosigners, you are afforded the opportunity of lesser interest rates and slightly easier chances of getting your preferred loans.

Read: Subsidized Vs Unsubsidized Student Loans: Which One Should You Go For?


One major reason why people do not recommend borrowing from friends and family members is that most times the loan ends up not being paid thereby causing relationships to deteriorate. 

However, when in a tight situation, the first place most people consider to source for money is from their closest acquaintance, friends, and family.

Before borrowing from your friends and family members, you might want to consider the pros and cons first before concluding.


  • It is a less rigorous option compared to other sources of capital. No long procedures were involved.
  • There are no/ less tough requirements expected of you. Your current credit status might not even matter to them. Some family members or friends might not even request to see documents other financial establishments will request.
  • More flexible terms and repayment plan.


  • Getting a loan from someone close to you might dwindle or mar your relationship. When you add a financial transaction to a relationship, it changes the basis of the relationship.
  • You might not be able to get as much money as you require. Your relatives might not be able to gain you access to large amounts, unlike financial institutions.
  • Broken boundaries:  They can demand their money back when it suits them but not your business. They may also want to get more involved in the business, which may not be suitable.

Note:  It is advisable you explore all other options first before considering a loan from friends and family. Also, if you get a loan from close persons ensure you lay terms first and also payback on time.


Are you are looking for a loan that would help you pay your tuition, housing fee, etc? As a student with a  bad credit score, you can also contemplate getting a student loan for bad credits.

Most personal loan lenders do not allow you to use funds for education, so you’ll have to consider getting student loans. Bad credit won’t disqualify you from getting a student loan. You can obtain federal student loans, which do not depend on your credit history.

It is always advisable to apply for federal loans first, however, if federal student loans will not cover your full expenses and fully help to pay for college, you may need a private student loan.

You should consider getting a cosigner for the process. Ensure you use the period of study to build up your credit score and then probably consider refinance loans later on to reduce the interest rate on your loan.

If you are wondering if a student loan is right for you, you should weigh these pros and cons and decide if you have a lot to lose or more to gain.


  • You are able to attend the college of your choice or dream without fear of money constraints.
  • It covers not only tuition but board, feeding, etc.
  • Your student loan payment is also one way you can revive or build your credit score.


  • “Starting your journey with debts”. Student loans indicate that you are willing to start your journey with debts 
  • Defaulting on your student loan will tamp down your credit score.
  • They can be very expensive.


Getting a loan from a bank where you are a longstanding or stable customer is very possible even with bad credit.

In cases where you were previously noted as a customer with a good relationship with the bank, especially a case where your credit dropped suddenly due to unforeseen circumstances. 

One of the first places people consider when looking to get a loan is a bank. You must however note that getting a bank loan also has its advantages and disadvantages.


A mortgage loan, popularly addressed as mortgage refers to a type of loan that allows you to procure houses, landed properties, homes, land, or any form of real estate purchase.

The loan is usually granted by a bank, mortgage lender, etc with the house or property itself standing as the collateral. In getting a mortgage loan the higher your credit score, the lower the interest rate you pay.

Generally, lenders like a minimum score of 660 or better, but you can qualify for an FHA loan with a score of just 500. 


  • You get to own a home possibly your dream home.
  • The mortgage is repaid little by little on a monthly basis, and based on the interest rate, your monthly repayments could be much lower than the rent you would pay in your neighborhood.
  • Interests paid on mortgage loans are generally lower than some other loans.


  • Since the house you bought stands as collateral, defaulting in loan payment will cause you to lose your home.
  • The monthly amount you’re paying may seem reasonable, but once you calculate the interest, the total amount you pay back over the years is huge.
  • By getting a mortgage loan, you are committing to long-term debt.

6. PAL( Payday alternative loans)

A payday alternative loan is a type of loan that allows members of some federal credit unions to obtain short-term loans designed to help meet unexpected needs.

This loan is regulated by the National Credit Union Administration( NCUA) and borrowers are given access to small amounts of money at a lower fee than traditional payday loans and repay the loan over a longer period. 

The good news is that a lot of credit unions that offer PALs don’t require users to have good credit. Most credit unions require you to have been a member for at least one month and to repay whatever loan you get within 6 months or 1 year.

The best way to find out if your local credit union offers these loans is to visit its website or call.

If you aren’t yet a member, you can also ask about eligibility requirements( note that not all credit unions offer payday alternative loans).


The 7th on our list of 15 ways to get a loan with bad credit is by getting personal loans.

Generally, personal loans are loans gotten for personal use, possibly to get a house, car, property, etc.  Struggling to borrow a personal loan with bad credit is a very tough and tasking process however it is not impossible.

While many lenders prefer borrowers with good credit scores, some of them have few loan packages that people with poor or fair credits can also qualify for. 

The only thing you have to do is pick out lenders you would like to get a personal loan from, check their requirements for all the loan packages, pick a package that suits you but also opens up opportunities for people with bad credits. Apply and most importantly, get ready a COSIGNER as most of the lenders would request one.

It’s beneficial to gather the documents and prepare the cosigner you need to apply for a loan beforehand, to fasten the process. 

Read: Best Unsecured Business Loans In 2022


Some online lenders lend people with bad credit money. Online lenders tend to encompass features like consultancy and advice to help build your credit.

Examples of some notable bad credit lenders are

  • Avant
  •  Money Mutual
  • LendingPoint
  • OneMain
  • BadCreditLoans 
  • CashUSA 
  • Personal Loans 


If you already own a housing property/house and you are in need of money, not minding using your house as collateral, you should consider a home equity loan. 

Home equity loans, widely known as a home equity installment loan, or second mortgage are a type of loan that allows you to use your house as collateral to get a loan.

You are allowed to borrow against the equity in your property. The home serves as collateral for the lender. 

The amount you would be allowed to borrow will be dependent on the home’s value. A home equity loan can be a good way to modify the equity you’ve built up in your home into cash, especially if you invest that cash in home renovations that heighten the value of your home.

You might want to access the pros and cons of a home equity loan before following through. The following are some notable pros and cons associated with a home equity loan.


  • Easily accessible.
  • Some home equity loans request lower interest rates than other types of loans.


  • You could end up owing or paying more than your home is worth if the market fluctuates and drops the value of your home.
  • It can lead to the loss of your home.


The No 10 on our list of 15 ways to get a loan with bad credit is cash advances. These types of loans are for emergency situations.

A cash advance is majorly given to assist in resolving an emergency before your next paycheck comes.

A cash advance doesn’t necessarily need a good credit score, it just needs you to be securely employed.

There are three types of cash advances: cash advance loans, credit card cash advances, an employer cash advances.

In the case of an employer’s cash advances, the money is given to you by your employer earlier than you would usually get paid.

Read: What Is A Jumbo Loan? Overview And How It Works


A title loan is a type of loan that allows borrowers to get loans using their vehicles as collateral. Failure to pay back the loan will cause the lender to retrieve your car.

Title loans are short-term and do not require your credit score or financial history and so are suitable for people with bad or fair credits.

Note that you can only borrow 25% to 50% of the total value of the car, and the lender will examine your car to determine its worth. Also, during your application, you’ll have to show your lender the car to be used as collateral, proof of ownership, and your license.

Although the lender defines your loan terms, title loans generally have terms of 30 days, similar to payday loans. Remember, failure to pay back your loan would lead to you forfeiting your car. 


One of the common types of small amount loan methods is a pawn shop loan( quite expensive though). A pawn shop loan is a fast means of getting money.

You only have to bring a valuable item like a piece of jewelry or an electronic, into a pawn shop and borrow money based on the item’s value.

Just like in a mortgage or title loan, a valuable item is placed as collateral.

While looking at its benefit as a fast small loan amount type, note that one of the major disadvantages, however, is its high-interest rate.

You don’t need a credit check to get a pawnshop loan and it seems to be less unsafe than a payday loan or title loan.


If you have bad credit, you may be able to get a microloan for your business. Microloans commonly come from nonprofits. Most of these nonprofit organizations are not driven by money and so they may be more willing to work with business owners with a thin credit history.

The downside of a microloan is right in its name is the size of capital gotten. They do not offer large amounts and this might not be good for start-ups, newly established, or growing small businesses.

Individuals interested in a microloan should contact an Intermediary Microlender in their area.


Boat loans are particularly organized to finance the possession of a boat and are accessible through banks, credit unions, and online lenders.

The loans can either be unsecured or secured, with secured loans using your boat as collateral. As with any vehicle-related loan, it’s important to keep depreciation in mind. The average boat loan lasts between 2-15 years.

An average boat is expected to depreciate for anywhere from 7 to 10 years after purchase, so imagine having to pay the same amount for a boat that keeps depreciating.  

Read: Upstart Personal Loans Reviews 2022


While other types of loan, give you money at the beginning and requests you pay it back by installments, the reverse is the case with a credit builder loan. You pay a fixed amount monthly and you get the whole money together after the term is over. 

A credit builder loan is targeted at helping people with bad or fair credits build up their credit. If you are not in a hurry to use a loan, you can try a credit builder loan.

You not only get a large chunk of money at the end but also build back your credit.  credit-builder loans exist in credit unions, community banks, Community Development Financial Institutions (CDFIs), lending circles, or online lenders.

It is a great way for young people to build capital and credit score. Once your payments are on auto-pay, you do not have to worry about making your payments and you can build credit entirely on auto-pilot.


While trying to find a loan that can help you in times of crisis and need, be sure you are careful with lenders especially online lenders.

Defrauders see people with bad credit as vulnerable and desperate and could want to use this opportunity to extort you by placing exorbitant interest rates on loans for you. 

There are still options to choose from even with bad credit. 15 ways to get a loan have been mentioned, including personal loans, family and friends loans, payday alternative loans, home equity, mortgage, bank loans, etc. 

If you are also not in a hurry to get a loan, it would be advisable for you to get a credit builder loan. 


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