My Credit Is Bad: What Options Do I Have for Obtaining Financing?

If your credit score is not the best, don’t feel alone. Many people go through periods when financial setbacks temporarily damage their credit rating. As you work to improve your credit, don’t assume there are no options when it comes to financial assistance for people with bad credit. Here are several approaches that will help if you need some type of short-term financing.

Peer to Peer Loans

Peer to peer lending involves creating a profile, designating the amount you need, and then explaining what you intend to do with the money. The amount of details that you include about the current circumstances is optional. Many applicants include just enough information to outline their situations while avoiding a lot of specifics.

In the best-case scenario, enough individuals will commit to providing the funding that you desire. Once you specify the amount, the third party that provides the loan platform will remit the funds to you. You in turn will submit a series of payments until the total amount is repaid plus the interest.

Short-Term Loans

If you have some emergency that requires quick cash, there are lenders who are willing to provide short-term cash loans in Ontario. That’s true even for people who don’t have the best credit score. In many instances, the lender is more interested in the amount of income you generate each month and less about what sort of financial issues have led to your lower credit score.

This is an excellent way to deal with something that you need to immediately resolve, like making repairs to your vehicle. Remember that you want to work with a lender who reports to two credit bureaus; since repaying the loan on time will help boost your scores with them.

Secured Loans

The fact that your credit rating is a little lower doesn’t necessarily rule out the possibility of obtaining a loan from a bank or other traditional lender. Many institutions have loan products designed for those with sub-optimum scores. Most of those offerings will require that you pledge an asset as security or collateral.

With this arrangement, do expect to pay a slightly higher rate of interest. You also need to ensure that the asset pledged as security is maintained in good condition for the duration of the loan. You also cannot sell the asset without permission from the lender.

Obtaining a loan through a traditional institution means that you can depend on the lender to report your positive payment history to at least one credit agency. See this as an investment that allows you to take care of a pressing need while helping to rebuild your credit.

Personal Loans

One of the most overlooked lending options is to approach someone you know about extending a personal loan. If you feel this is the best way to go, it’s important to work out all of the loan terms and conditions in advance. That includes the amount of interest you will pay on the loan balance, a schedule for the loan payments, and possibly pledging an asset as collateral.

Even though this would be a loan from a friend or relative, treat it as a purely business transaction. Ensure the loan contract terms are clear and provide protections for both of you. As with any loan situation, it’s important to make the payments on time. Failing to creates more problems for your credit rating. It would also damage the personal relationship between you and the lender.

Medical Loans

What type of obligation do you need to settle as quickly as possible? If there’s a debt that has to do with some type of medical procedure, you may qualify for some sort of medical loan. You will find that loans of this type offer reasonable terms for repayment. Many lenders guarantee responses to applications in two business days or less.

Assume what would happen if you needed some type of dental work done. It happens that you have limited or no dental coverage. If you are approved, the lender would remit the payment directly to the dental clinic. You in turn would repay the debt using a series of payments provided by a collection agency.

Bad Credit Loans Designed to Help You Rebuild Your Credit

You’ve tried to obtain a bad credit loan from a traditional lender and things didn’t work out. Don’t give up. There are third-party lenders who offer similar type of loans. There may be a finance company that you can try, or a local lender who specializes in loans that are under a certain amount. Along with those, you will find online lenders who would be willing to provide the financing that you need.

If you opt for the online approach, there are loan brokers who will accept your application and match it to lenders who work through the brokerage. You could receive one or more offers involving different lenders. In that scenario, check out the terms and conditions related to each offer, then go with the one that works best for your situation.

Even if your credit score is not the best, there are likely several lenders who would be willing to work with you. Consider all of your options carefully, then submit applications to the ones that seem the most promising. With the right solution, you will have the funds quickly and be on the way to improving your credit score.


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