Knowing how to borrow money with bad credit will ensure you don't waste time endlessly filling out applications only to be repeatedly denied, and can put cash money in your hands you thought you had no access to.

Let's face it, most people will at some point have need of a cash loan at some point in their life. Personal lending can help you weather tough financial times, allow you to seize business opportunities, and empower you pursue your dreams...

The unfortunate reality these days is all too many people have bad credit having fallen behind at some point, due to jobloss or because of financial mistakes made during your less responsible youth. Low scores translates into higher monthly bills on credit cards, mortgages and other personal loans and other financing, denying you access to money you could use when you need it most.

With a bad financial reputation your borrowing costs are higher, and some lenders simply refuse to deal with the high risk of giving you a second chance. You can't blame them, they are in the business of making money on the cash they lend, but this guide is about getting bad credit loans approved in spite of your past, so lets get to it...

 

How To Borrow Hassle Free With Your Job Earnings

It you have a job and need to cash for a short term emergency, you can use your salary as "collateral" to a direct payday lender and they will advance the money you need. Payday loans are the most common lending to find online that accept people guaranteed by their income rather than credit score. If your income is high enough you can generally use it to qualify with a regular bank for more traditional borrowing at better terms.

To qualify for a payday advance you must provide a post-dated check and your lender will deposit your cash into your checking account, repayment will draft automatically when you receive your next paycheck. No credit check loans are very popular because they are so easy to qualify for, they provide near instant funding, and account for millions of dollars borrowed each and every month in eligible States.

Advantage:

• Near Instant Money Funded Direct Into Your Account
• No Credit Check - Bankruptcy OK, Foreclosure OK, Repossessions OK
• All Online Application Process - Fill Out A Quick Form To Borrow
• Financing is Unsecured - No Security Needed

Disadvantages:

• Attaches To Your Bank Account
• Expensive Borrowing Costs
• Paycheck Deductions Mean Smaller Paycheck Come Next Payday
• Typically Short Term Repayment Schedule

Have you heard about the dangers of payday lending? Well there is truth in what is said, borrowing too many loans at once can lead to a bad situation in which all the payments are deducted from your paycheck leaving little left for you come next payday. As you can imagine, not an ideal situation, one that can lead to financial trouble, but if you borrow responsibly, it can be a powerful financial tool in a pinch.

 

Ways to Borrow Money with Bad Credit Secured

If you are cash strapped, broke, in need of money fast, the first avenue many turn to is to use a pawn broker where you can pawn personal items of real value to the store. These stores will accept personal items like jewelry, watches, gadgets, musical instruments and even personal computers.

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The pawn broker will assess the value of your item and the money will be given to you in exchange for your personal items to secure the loan. If you fail to meet the repayment obligations the pawnshop will keep what you put up as security for the cash received.

Advantage:

• Instant Access to Cash
• No Qualification Requirements
• Lightning Fast Needing Only a Short Form To Fund
• Very Flexible Acceptance of Security Items

Disadvantages:

• Requires Security Deposit of Something Valuable
• You Can Only Borrow A Small Portion of The Securities Actual Value
• High Borrowing Costs

Most pawnshops will keep the items you have for a month or more with interest. If you are not able to pay to redeem the loan in a month, you can renew the pawn agreement effectively extending the terms paying only interest. It will go on until you get your item back. If at any time you stop paying the monthly interest, your personal item will be forfeited, put on sale or auctioned off. The monthly interest rate is high too. Not necessarily the ideal solution to borrow money with a low score, pawnshop lending offers loans for people with poor credit and same day cash.

 

Car Title Loans

Another borrowing option to consider is to use your car as collateral. No matter what your scores, title lender can usually offer you some money depending on the value of the vehicle used to secure the cash.

Additionally, if you have equity in your car, consider refinancing of your auto loan, in which you borrow in excess of what you currently owe. Before you consider the high costs of a car title lending, see your online auto loan rate quote to borrow against your vehicle, in some cases you can quickly reduce what you pay in bills and free up additional money. Both borrowing options require a certain minimum value in your car to make it worth while for the lender.

The lender will ask to assess your vehicles value, you will be asked to provide the model, its condition and the year it was made. Getting these bad credit loans approved is easier because of the security, but the lender will keep the title on your car as insurance in case you default. The grace period for repayment is typically 30 days and it is renewable every month thereafter, but this can vary so read your lending agreement carefully.

Like all loans for bad credit, a title loan will inherently have a high percentage interest charge, and can be considered expensive when compared with good credit financing options. This is the unfortunate reality when borrowing money. If you default in payment or you are falling too far in arrears with your payments the lender has the option to repossess your vehicle.

Advantage:

• Fast Borrowing Option
• Bankruptcy, Foreclosure, Repossessions Accepted
• Possibility Of Borrowing Larger Loan Amounts

Disadvantages:

• Car Value Assessment Must Be Made
• Car Pledged As Security - Risk Of Losing Vehicle In Case of Default
• High Borrowing Costs

If you default, the lender will claim and sell your vehicle to replace the lent money. If the cost of your vehicle is not enough to cover what you have borrowed, you will be asked to pay the difference on top of losing your vehicle to repossession. You have the option to recover the vehicle in some cases but you will have to do it before the car is sold to another buyer and you need to pay the necessary fees which can include the interest, repossession fee and the outstanding loan amount you have with the title lender.

Beware of pledging as security your means of getting to and from work--if you fall behind you could lose your ability to get to work and the income it provides.

What Lenders Consider For Loan Approval

Are you noticing a trend among the borrowing options for people with bad scores? Higher costs, interest increases, risk of pledged security, and hassle. To get approved you need to make it worthwhile for lender in some way, to make it worth the higher risk of lending you the money you want. Unfortunately that translates into higher fees in most cases. Are they sticking it to you? You bet, but you have little choice until you repair your credit.

A low score need not prevent you from borrowing, but the best option is to work to fix your score, get back on your financial feet and unlock all the better financing opportunities you can't qualify for now.

If you want to learn more about creative borrowing for people with bad credit, check out our complete guide fixing your credit scores for free. Or check out the longer term lending programs for bad credit people we recommend if you would like to see some of our favorite resources providing quick & easy financing online.