How To Get A Personal Loan Online With Bad Credit

With the pandemic causing great damage to the economies of various countries and a staggering number of people filing for unemployment, most people find themselves strained and taut on the money. Of course, no one wants to be placed in this kind of situation.

However, if you are tight on money, you may want to consider applying for a personal loan to make ends meet. Still and all, when you have bad credit, it might feel unfeasible to get a personal loan.

The good news is that there are ways of obtaining a personal loan even with poor credit. So, if you are worried that you will not qualify for a personal loan, read on!

Take Time To Improve Your Credit Score

Although this might be the best method to get a personal loan with bad credit, it will not work if you urgently need cash. Being patient and raising your credit score might, without a doubt, help you save money over time and get you better terms and rates.

You can start by examining your credit report and discovering areas wherein you can improve. No matter whether it takes a long time, you will be, for sure, surprised and amazed how many golden opportunities are available to you once you have a better credit score.

Moreover, so that you can boost your credit score, you must first know how it is computed. For the most part, credit scores are consist of five factors:

  • Types of credit – On your credit report, different accounts can raise your credit score. Say, for instance, having several credit card accounts, a car loan, and a mortgage on your credit report can make you look great, provided that these accounts are all in an excellent position. However, it does not necessarily mean that you must apply for new accounts because it could impact your applications.
  • New applications – Keep in mind that many new credit checks can damage your credit score. With that said, don’t apply for new accounts within the same period.
  • Credit age – This factor is determined by how long you have had a credit file. Sadly, all you have to do is to wait. But you can steer clear from damaging your credit age by retaining old accounts.
  • Credit utilization – The lower your credit utilization ratio, the better. Take note that a ratio of at least 31 percent can damage your score.
  • Credit history – Make your credit history better by repaying your old debts and making timely payments.

Consider Getting A Secured Loan

Secured loans give lenders guarantee that borrowers will repay what they owe by needing them to take out a loan against an asset. These resources and valuables could include your card, savings, retirement account, or home equity.

Keep in mind that secured loans should not be taken lightly. With a secured loan, if you cannot pay it back, you risk losing your asset. But if you choose to take out a secured loan, ensure to make timely payments.

Get A Cosigner

More often than not, lenders will permit you to get a loan with poor credit if you get someone with a stellar score to cosign the loan. To put it simply, a cosigner agrees to repay the loan if you default on it.

Getting someone to cosign for you is undoubtedly a huge commitment. That said, give time for your friend or relative to think about becoming your cosigner.

Borrow From Family And Friends

This method should not be taken lightly as well. With secured loans, you risk losing your important assets. However, in this method, you risk losing your relationships with your friend and family if you fail to repay what you owe.

So, before anything else, it is vital to plan everything, from the loan term to the due date of the loan. Consider laying down some rules before borrowing from your friends and family.

  • Make a contract – Both parties must sign and consider this contract as a legally-binding template.
  • Set terms – Consider this as taking out a loan from a traditional bank. Talk with your lender to come up with terms, amount, and timeframe that will be best for both of you.
  • Add interest – For the most part, you might think that you do not have to deal with interest because you are borrowing money from someone you know. However, the Internal Revenue Service thinks the opposite. The person you are borrowing money from could be charged with extra taxes if they do not add interest.


There are a lot of reasons why you might need to get a personal loan, for instance, consolidating debt and paying a large expense. Whatever the reason, personal loans can be really helpful. Just keep in mind that when you have a bad credit score, it is still possible to get a personal loan, but it will be difficult.

Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.