How to Get Very Bad Credit Loans

If you have very bad credit and are searching for a loan, you are not alone. Innumerable scenarios may lead to a decline in the strength of a personal credit history, and one such scenario sometimes leads to another. Many people experience the downward spiral. Even those people with the worst credit histories, however, may still find a lender willing to extend credit if they take the time to gather all relevant documentation and provide a reasonable presentation of their circumstances to a loan officer.

Difficulty:

Moderate

Instructions

1. Put together a complete picture of your finances. Everything that you spend, all the income you make, all your assets, and any existing loan payments must be neatly laid out before you begin. Make copies of your bills, pay stubs and statements. The lender will need to see that you will be able to make the necessary monthly payment. Otherwise, you will not even be considered for a loan.

2. Visit financial institutions and ask about secured loans, which require some form of collateral, such as a house or an automobile.

3. Research your options online. Many online lenders are able to offer loans to people with very bad credit because of they do not have to pay the overhead expenses that accompany a stick-and-brick presence.

4. Consider a payday loan as a last resort. Payday loans are available to nearly anyone who has proof of employment. Because of the extremely high interest rates, however, a payday loan is a form of credit that should only be used if you are certain you will be able to pay the balance in full when you receive your paycheck.

Tips & Warnings

• Never take out a payday loan to pay off another payday loan. This begins a cycle that can be extremely difficult to break and very expensive.

References

• Bankrate.com; Officials call payday financing "loan sharking"; Stephen Rothman; Feb. 17, 1998