Roxanne“Bad Credit” Definition
In terms of your FICO score, “bad credit” means anything 579 or below. Such a score limits your options compared to something higher that would put you in the “fair credit” bracket.
Finding funding is not impossible with bad credit, however, so let’s look at where you could score a personal loan when you’re in a pinch.
Your Local Bank or Credit Union
You may think that local banks or credit unions only offer loans to borrowers with solid credit. That’s not entirely true, though, as you will find some institutions that will make exceptions.
Why would a local lender be willing to work with you? So they can better serve the community. This is especially true with credit unions since they are not-for-profit institutions.
There’s another reason why going local may get you a loan: familiarity. If you have an account with a local bank, for example, that receives regular pay, they’ll see your transaction history. By recognizing that you have income, they may be more likely to grant you the loan over an online lender who doesn’t know who you are.
You also have the added advantage of an in-person meeting with local banks and credit unions. When speaking with a loan officer, you can explain your situation entirely. They can give you face-to-face tips on how to improve your loan application so it gets approved. You can also discover new lending options that you may not have known existed.
What’s the downside to getting a personal loan locally? In-person meetings take time, and the application process may be more tedious than with an online lender. Still, it’s an option worth looking at if you’re limited.
Online Lenders
OneMain Financial
OneMain Financial has been around for over 100 years, so they’re no fly-by-night operation. They have over 1,600 locations and offer personal and auto loans from $1,500 to $20,000 with fixed rates and no origination fees.
Regardless of how bad your credit is, there’s no minimum credit score required, which is a plus. While that can get you in the door, OneMain does have interest rates that can exceed 30 percent, so read the fine print before proceeding. If the loan isn’t a real emergency, paying such high interest may not be worth it.
You can receive same-day funding, but you may be required to visit the nearest OneMain office for verification before getting the loan approved.
LendingClub
You can get a loan up to $40,000 with Lending Club that carries fixed interest so you won’t get any surprises. Depending on your credit score, that interest rate could exceed 30 percent. Once again, you’ll need to read all the fine print before making a decision.
You can repay the loan in three or five years, which can keep those monthly payments low. There is an origination fee of one to six percent, however, which will cut into the actual amount of money you can work with.
