How to Get a Signature Loan with Bad Credit

If you want to get a signature loan, bad credit may be a hurdle in your way. However, bad credit does not necessarily rule out your ability to obtain one. Here are a few things to consider about getting a signature loan with bad credit. 

Shop Around

When you have bad credit, you are going to have to be patient while searching for a signature loan. Although many lenders may not choose to do business with you, this does not mean that no lender will be willing to work with you. Different lenders have different lending criteria. The financial ratios that they use vary from one lender to another, and you may be able to find one that does not automatically eliminate those with bad credit. This is why shopping around is so critical. If you give up after one rejection, you will be cutting your opportunities short. 

Get a Cosigner

Having a cosigner on a signature loan can greatly increase your chances of being approved. It is essential that the person that you are having sign the loan have good credit. When a lender evaluates you for a signature loan, it is going to look at the credit files of all parties involved. A cosigner with good credit can help to even out the risk for the lender, making you a more desirable customer.

Fix Errors on Credit Report

Many people just take the credit scores that they are assigned and never bother to look at the reasons why they are so low. If you are going to need a signature loan in the near future, you should take a look at your credit report first in order to see exactly what is wrong. You may be able to identify discrepancies in the report that should not be there. With this information, you can contact the credit bureaus and file a dispute. Depending on what the credit report says, the credit bureaus may be able to remove certain blemishes against you. While this method will probably not completely fix your credit, it can make enough of a difference to help you get a loan. 

Consider Sub-Prime Lenders

The sub-prime lending market is designed for those with bad credit. If your local bank will not finance the loan, you should consider looking at one of the many sub-prime lenders that are available. These businesses make a business out of working with those that have low credit scores. They will charge you a higher interest rate than what you could get with a normal loan, but it could be a way to get the money that you need. If you cannot find a sub-prime lender in your area, you should be able to find several online to contact. 

blog comments powered by Disqus