Personal loans can be the answer to all kinds of situations when you urgently need cash in your hands. Maybe you need to fund your child’s education or consolidate debt but you have a bad credit rating. If you are thinking of selling your house to compensate this maybe you should think again. You can actually do something about your bad financial reputation.

Do lenders approve loans for people with a bad loan reputation?

This article means to discuss the go-to options for people with bad financial reputation.

Do Financial Institutions Approve Loans for People with Bad Credit

Having bad credit may be a stumbling block but, don’t lose hope if you have bad credit or still building your credit. Personal loans are unsecured loans but don’t lose hope you can still get by somewhere.

Do something to improve your credit standing. Credit standing is the most important factor in getting an unsecured loan like a personal loan. What you got to do is pay your credit card balance and your outgoings on time, then wait for an increase in credit rating.


Don’t go for the first lender and sign above the dotted line immediately. Shop and ask around. Go to for some advice.

If You Get Disapproved Repeatedly, Try These Other Options

Credit Union Personal Loans for Bad Credit

Another option for getting personal loans are credit unions. Credit unions are nonprofit organizations which operate like banks. Members have ownership in this organizations. They pooled resources to provide financial services to their members. Credit union loans offer rates much lower than a bank or financial institution’s rates.

First, you have to be a member. You have to meet certain criteria typically depending on the industry you are working, your location, etc. Becoming a credit union member is easy. You’ll be required to file an application and deposit a fixed amount then you’re good to go.

For new members, it may need longer time to apply for a loan. Even if you don’t have a solid record yet, they still approve loans for people with bad financial reputation. In small communities, you can speak to the staff and tell about your situation. If you have been a credit union member for quite some time and had a track record, you will be quickly approved.

Peer to Peer Loans for People with Bad Credit

Peer to peer lending or social lending is run online. The process is made thru computer algorithms where borrowers are matched with the investors. They have no physical offices making the interest rates lower than any financial institutions.

Loan amounts vary depending on the purpose. Payment terms range from one to five years. Payments are electronically deducted from their bank accounts.

Peer to peer lending is easy to apply. Interest rates are lower than financial institutions. There are no hidden fees, and monthly payments are fixed. If you pay off your loan before its due date, there’s no prepayment penalty. You can apply for a subsequent loan if you are a good payer.

Final words

There are other avenues even if you have bad financial reputation standing. Look for other avenues to fix your situation by looking at other possibilities. Shop for institutions who allow loans for people with bad credit. Also, try to establish your finances by sourcing out some extra income might it be through investing in a new business or other part-time jobs.