You might have had a bad day or need some extra cash. Whatever the reason, you are wondering how to get small loans with bad credit. Don’t worry—options are still available if you have poor credit. It just requires more work upfront. Let’s walk through your options and explain what each entails so that you can decide which method would be best for your situation.
Check your credit score.
The first step is to check your credit score. Your credit report contains information about how you’ve managed your money, but it only tells part of the story. Your credit score is different: It’s a number between 300 and 850 that indicates how likely you are to repay a loan. This number can help determine if you qualify for loans and what interest rate they will charge. Suppose a lender disapproves of your application because of mistakes on your credit report. In that case, it’s essential to get those corrected before applying for another loan, as having errors on your record can make it difficult for you to get approved for loans in the future.
Review your credit report for any inaccuracies or items to dispute.
Before applying for a loan, review your credit report for any inaccuracies or items to dispute. The Fair Credit Reporting Act requires the three major credit bureaus (Equifax, Experian and TransUnion) to investigate all disputes; however, they can take up to 30 days to respond. You should dispute it immediately if you find anything that could affect your ability to get approved for a small loan with bad credit or even a credit card.
Once you’ve done this step and verified the accuracy of all information listed in your report — including account numbers, addresses and other details — create an outline of how much money you need and what type of lender will best serve your needs superstep.
Apply for a small loan from a direct lender.
There are a few benefits to getting small loans from direct lenders. First, they tend to have lower interest rates than traditional banks and other financial institutions because they do not require a co-signer or collateral.
Second, direct lenders are more likely to approve your application for a small loan on bad credit than most other sources of financing. Thirdly, if you’re looking for a small loan but don’t have enough saved up in the bank yet, direct lenders may be able to offer you enough money so that you can pay off those bills that have been weighing down your credit score and improve it over time. Lastly—and perhaps most importantly—direct lenders are more likely than traditional banks and other financial institutions in many cases to offer borrowers multiple options for borrowing amounts ranging from $100 up to six figures (though usually not relatively as high as this).
Apply for a loan through an online marketplace.
Online marketplace lenders are a good option for getting small loans on bad credit. These companies often have easy-to-use online applications and can be the best way to get a small loan if you want to avoid dealing with banks or local payday lenders. The downside is that they tend to come with higher interest rates than other options because the borrower, not the lender, covers their fees. Online marketplace lenders also often offer various loan options, including instalments and personal loans.
Remember to always be proactive when it comes to your credit score. If you need help getting approved for a loan, you must review your options before completely giving up on the idea. Consider applying for an alternative loan or cash advance through an online marketplace!