What options do consumers with little or no credit have when they need money?

How can I borrow money with bad credit?

Whether it’s a family emergency or a gap between paychecks, there may come a time where you need extra income and fast. Bills are past due, unexpected expenses are arising… Finding the money to ease your worries is no doubt a stressful situation. If you have little to no credit, you may be wondering, “How can I borrow money with bad credit?” Luckily, there are money lending options available to those with little or no credit.

Knowing Your Options

Despite what many people believe, borrowing money is very common. In fact, according to, 34% of Americans have taken out personal loans. That’s roughly 83.5 million people. In order to borrow money with bad credit, It is always important to be aware of what types of loans are available to find the right lending option for you. 

Payday Loan

Payday loans, also called cash advances, are short-term loans. Depending on the state law, payday loans range up to $500 and should be repaid within the borrower’s next pay period. 
Unlike installment loans, there are no monthly scheduled payments for payday loans. Which makes it a good option for borrowers looking for a loan with a short commitment time. This is also great for lenders because it allows them to receive their return investment quickly.
Payday loans are a prime choice for borrowers with little to no credit because, the borrower’s ability to repay the loan, while meeting other financial obligations, are not considered by the lender.
The process is fast and simple. 
  1. Provide proof of income.
  2. Write a check for the full balance of the loan, plus feeds and interest owed.
  3. And then the loan is issued.
If you are unable to provide a check, the lender will be authorized to electronically withdraw the funds from a banking account. If the loan is not repaid, this allows the lender to withdraw the loan amount on their own. This ensures the lender that they will receive a return.

Car Title Loan

A title loan is another type of short-term loan, in other words, the money can be acquired fast and simply
This type of loan requires the borrower to use their vehicle title as collateral. The lender provides the money for a small fee which is scheduled to be repaid within 30 days. If the loan isn’t repaid, the lender is entitled to take the vehicle.
Credit isn’t considered when taking this type of loan because the vehicle is used as collateral. If the borrower is confident that they can repay the loan on time, it is a good option.

Co-Signed Loans

Lenders are generally skeptical when considering giving loans to someone with little or no credit. Without financial reassurance, lenders are reluctant to approve a loan without any form of trust that says their money will be returned to them. One solution is a co-signed loan. 
A cosigner is a person who agrees to pay a borrower’s debt if the applicant defaults on the loan. In most cases, this individual has a good credit score and an extensive credit history. They act to assure the lender that the borrower’s loan will be repaid.
Co-signed loans are good strategies in helping applicants establish a loan history and help them build good credit. This form of loan can act as a training wheel to assist borrowers with no or little credit.

Home-equity Loan

If a borrower has a home, they could consider applying for a home equity loan. This type of loan uses the borrower’s house as collateral. As a lender, this form of loan is considered reliable because the home could be acquired if the loan isn’t repaid.
Lending to a Family Member or Friend
According to the Federal Reserve Board Survey of Consumer Finances, loans from family and friends amount to $89 billion each year in the United States. Loans from family members are preferable for borrowers with little to no credit because this type of loan is generally more flexible with payments.
The main risk involved in lending to family and friends is the potential damage to the relationship if payments are past due or unpaid.

Lend Smart

Decision Cloud is an online platform that supports private lenders by helping them identify the best leads. Using complex and reliable algorithms, we can compile data from third parties to calculate a borrower’s score. This information tells you how likely it is the borrower will repay the loan. Lend to qualified leads today!

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