If you’ve been following my journey, you probably know by now that I would never be an advocate for digging yourself deeper into debt. While this is true, I’m still a realist and I understand that life doesn’t always give you the time to get right with your finances before you find yourself neck-deep in a big, fat, financial emergency. These emergencies are a big part of why financial institutions offer small loans; to help get through those hurdles life throws at you. If you are struggling to get ahead and think you might benefit from taking out a loan let me tell you how you can take out a personal loan even with bad credit.
*This post contains affiliate links. Although I may earn a commission, all recommendations are my own.
What is a small personal loan?
Small personal loans are loans where you are borrowing significantly less money than larger, more common loans like a mortgage or student loans. These small personal loans often fall between the more minimal price range of $500 – $5,000.
Because of the smaller loan amount, you will usually see a shorter loan term as well. That means instead of spending years making payments, you may have only 2.
Personal loans are generally given when people are going through tough times in order to help them stay afloat and are used for emergencies when people don’t have enough savings to cover their expenses. This is what they are most often used for, but there are also a few other benefits a small personal loan can offer you.
Getting help with your credit score
Learning your credit score and getting help with improving it can help you tremendously. Although with personal loans, it is not necessary to have an outstanding credit score to get a personal loan, it is helpful.
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Having a bad credit score might not stop you from taking out a loan, but it can definitely set you back in a lot of other ways. It is almost always beneficial to get additional help from professionals to improve your credit score.
4 things you need to qualify for a loan
In order to qualify for a small loan, there are a few things you’re going to need before you get started with the application process.
- Appropriate Identification
- Steady Income
- Bank Account
When giving out loans, credit companies may be willing to work with you even if you have bad credit as long as you can demonstrate your responsibility.
Major setbacks include:
- Accounts more than 2 months late
- A current or recent bankruptcy
- Patterns of late payments
- Recent charged-off accounts
- Debt larger than your current income
It’s safe to say that companies are willing to work with low credit scores, but do not want to work with people who they believe will struggle to make payments.
This is beneficial to both the borrower and the lender. If you are already struggling financially, it would not be a smart move to dig yourself into deeper debt. Instead, your best bet would be to get help with credit repair and get started on a smart debt payoff plan.
How to apply for a loan
The application process is relatively quick and painless.
- Head to PersonalLoans.com
- Select the amount you would like to borrow
- Enter your email to get started
From there you will be able to go through the loan application process with some basic information about the loan amount and type as well as some banking information.
If you are approved you can receive your funds in as little as a day.
How to pay off your loan quickly
Even though you may qualify for a lower interest rate, it’s still beneficial to you and your finances if you can work to pay off your personal loan quickly.
My top recommendation for paying off personal loans and all other debt is to use the Dave Ramsey Debt Snowball. Our family used this method and were able to pay off $6,000 of debt in only 6 months.
Basic Debt Snowball guidelines
- Find an extra $200 per month in your budget
- Apply that $200 to your smallest debt’s minimum payment until it is paid off
- Continue making minimum payments on all other debts
- Once your smallest debt is paid off apply that $200 plus the minimum payment to your next smallest debt.
- Continue this process until all of your debt has been paid.
As I said, this method worked wonders for our family and is laid out in Dave Ramsey’s Baby Steps.
Quick ways to earn cash
If you are needing funds fast and don’t believe you’ll qualify for a loan, my best recommendation is to find ways to earn that cash and fast. I am a strong believer in the major results of a little side hustling.
Here are my best recommendations for good paying side jobs:
- Survey Sites
- Teach online
- Uber – Driving for Uber offers flexibility, great benefits and you can get paid up to three times per day.
- UberEATS – Get the same benefits as Uber except you can deliver food instead of people with UberEATS!
No matter what the case, or what your circumstances, your financial destiny is in your hands! Don’t let bad credit discourage you and don’t let a few mistakes set you back forever.