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Step 1
Apply for a loan with subprime lenders. Lenders who are "subprime" specialize in credit products for people who have low credit scores or other issues that can keep them from getting approved through traditional lenders. Look for a lender who advertises the ability to approve loans for people with bad credit. Be prepared to pay a much higher interest rate than you would if you were approved for a loan through a mainstream bank or credit union, and keep in mind that you'll also probably encounter a wide variety of fees such as prepayment penalties and monthly service fees.
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Step 2
Use collateral to secure your loan. Lenders are usually more willing to approve loans for people with poor credit if the application includes collateral securing the loan. Equity loans, which use the equity in your home as collateral and make the lender an additional lien holder on the home, often offer attractive interest rates. Since the loan is secured with equity, lenders may offer lower interest rates. Some lenders also allow borrowers to secure loans using cars, but these loans may still feature high interest rates and high fees.
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Step 3
Consider person-to-person lending. If you don't have a friend or family member who is willing to give you a loan, explore the options for P2P lending available online. Websites like Prosper.com allow users to apply for personal loans that are funded by one or more individuals through the website. The interest rate varies because users bid on how much they are willing to lend and at what interest rate. There is no guarantee that you will get approved for a loan, but if you have no other option, then it's worth a try.
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Step 4
Use payday lenders as a last resort. These loans come with huge fees and incredibly high interest rates. In addition to these pitfalls, many borrowers fall into perpetual cycles that can cause big financial problems as the borrowers obtain one payday loan after another. Despite these issues, many people resort to these lenders because they are not able to get a loan using any other method.
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Step 5
Secure a loan with a savings account, certificate of deposit or some other money that is in your name. This is an option for borrowers who do not feel comfortable draining their emergency funds and would rather borrow the money they need. Lenders may be willing to offer attractive interest rates to borrowers who freeze funds in a savings account until the loan is paid in full.
