How to Get Cash When You Have Bad Credit

If you’ve been downsized or laid off, if you’re still weathering the effects from a sluggish economy and your credit has taken a hit, there are still opportunities for you to get cash when you need it.

Normally, having poor or no credit can hinder you from getting a loan or credit card.

However, using a bit of creativity and some Internet research, we’ve compiled a list of five options for you to consider. Hopefully at least one will be the right fit for your circumstances:

Secured Credit Card

While a credit card isn’t technically β€œcash” it does give you additional financial resources. Secured credit cards require you to load a certain amount of money ($200, $300, whatever your budget will allow) into that account prior to use. That money deposited represents your credit limit, or in other words β€œsecures” your limit.

When you make a purchase of say $100, you will receive a statement to begin paying your bill. As you repay that amount, you β€œreplenish” the amount of credit you have.

The benefits of a secured card include the potential for you to rebuild your credit score and learn better money management skills.

Always read the information regarding the credit card offer completely to make sure the terms fit with your situation.

Apply to Credit Unions

Credit unions offer many of the same borrowing opportunities as traditional banks. The main difference is a credit union is a nonprofit organization that passes along any earnings to the union members. Originally credit unions served members in certain professions or skilled labor jobs such as teachers, electricians, and autoworkers.

However many credit unions now allow people to become members regardless of their field of work.

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Because credit unions are smaller than banks, they often have more lenient qualification standards. They also have the capacity to offer more one-on-one customer service and may be willing to work with you for your borrowing needs.

Again, this is an option that may provide you with the money you’re looking to borrow and help reestablish your credit.

Title Loans

Car title loans have become a very popular option for borrowers with poor or no credit. By using the equity in your paid-in-full vehicle you can borrow money using your car as collateral. You temporarily surrender your car title to the lender, regaining possession of it once the loan is repaid.

An online title loan also allows you to keep and drive your vehicle throughout the terms of your loan.

One key benefit of borrowing against your car is the quick approval and funding process, very often in a day or less. Many lenders offer the conveniences of an online application, a title loan calculator, and 24/7-customer service.

While there are many advantages to this borrowing option, make sure you understand the complete terms a lender offers. Loan details such as interest rates and repayment plans may not be the same across the board.

Get a Student Loan

If you’re thinking of going back to college, but you don’t know how to pay for all your expenses, consider applying for a student loan.

These days there are many different kinds of student loans. And as with any lending market there will be different requirements, terms, amounts, etc. However one strong bet would be a federal student loan.

Federal Student loans don’t require a credit check and is based on need. Applicants fill out a free application for Federal Student Aid (FAFSA) that will ask questions about your income, living expenses, etc.

You will also need to supply information about your school tuition and related expenses, including textbooks, supplies, lab fees; transportation costs and any childcare (if that is a factor) as well as groceries.

Many people choose to take out the maximum loan amount per semester and use the remaining money to cover living expenses.

Being consistent with your student loan payments is an excellent opportunity to repair a shaky credit history. While it may take several years to repay the loan, often the payment amounts can be quite affordable.

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Apply For a Peer to Peer Loan

Peer to peer lending (P2PL) is relatively new – only since 2005 or so. This online platform consists of independent individuals willing to lend money to borrowers, or β€œpeers”, who are most likely complete strangers to them.

You can research P2PL online to get a list of potential lenders. Read the background and terms to become familiar with why and how they fund loan applications. You’ll apply online stating the amount you’re looking for and the reason you want/need it.

Many peer-to-peer loans still require a credit report. However, since you’re working with an individual lender there is always the possibility that your loan will be approved anyway.

And you can always prepare a more detailed letter outlining your request and if necessary, explain the reasons for your credit mishaps (e.g. loss of job, injury, etc.).

Family

While many people believe that getting a loan from family or a friend might be a convenient and obvious choice, this option can also be stressful for both parties.

Getting a loan from a family member may be in your best interests, but not necessarily those of your relative.

The borrowing opportunities listed in this article can be your private matter. These don’t need to involve anyone else in the process and no co-signers are needed.

You’ll also have the opportunity to rebuild your credit for future borrowing needs (a house, business loan, or a car loan).

Make a Choice

Whatever borrowing method you choose, make a plan to set yourself up for success: Do thorough research to become familiar with the various companies and/or websites that you want to approach. Prepare all paperwork in advance, so you can be organized. This will also expedite your loan application.

You may have bad credit today, but there are still ways you can get a loan to put more money in your pocket.