Many folks have taken some pretty bad hits on their credit reports thanks to the lousy economy and rising unemployment. Times are tough and $5,000 suddenly seems like a large sum. It could help some households maintain stability. It may not seem probable for a person with bad credit to borrow that sum, but it happens. You just need to check out all possible sources.
Check Traditional Financial Institutions First
If you have accounts with a bank or credit union, you may have some success exacting a $5,000 bad credit personal loan from them despite a spotty credit history. Holding retirement or investment accounts with them, is all the better. Your success in landing a loan will have a lot to do with your standing with the institution over time. Your checking account should not show too many overdrafts, for instance. Another boost would be good performance on any loans you have held with them previously.
Bad Credit Lenders
Do not be appalled at the term. It is used in the industry and has no stigma attached. A peculiar thing has happened lately. Because of the great recession, unemployment and the resulting bad credit scores pinned on many, private lenders have entered the lending market. Banks and credit unions have tightened their lending standards, making it tough for even good customers to coax loans from them. Seeing the growing market of folks with bad credit who need loans, non-traditional lenders have stepped in to fill the gap. It has turned into a thriving, market marked by a fierce competition that holds down interest rates and lending fees.
Shopping for Bad Credit Lenders
You may find storefront lenders in your communities willing to make $5,000 bad credit personal loans. Read the fine print and be sure their rates are competitive. However, you can shop for loans from the comfort of your home or office by going online. Just put the key term Personal Loan in your browser and you will be faced with scores of lenders who may be willing to lend to you. Your interest rates will be somewhat higher than for those with good credit. But, as noted, the market is full and you should be able to pick and choose to find the best interest rates and most comfortable repayment terms. You will be able to select loans that require collateral, or that offer lower interest rates, or pick an unsecured loan with higher rates.
Check Out Prosper
Check out an online lending marketplace called Prosper. It allows you to place a sort of want ad. You submit a financial profile and the amount you are looking to borrow, and perhaps why you want to borrow it. Then private individuals put bids on your request. Interest rates and loan amounts offered will vary widely. This is a good alternative to find the funds you need without going through the messy lending process required by traditional and non-traditional lenders.
The Last Straw
If you just cannot seem to land a $5,000 bad credit personal loan, you might want to take out a combination of payday or cash advance loans to get that amount. These types of loans can range from limits of $500 to $1,500. You may need to contract five or six of these to get $5,000. These loans usually require payment within 30 days. Having all those loans come due at the same time could turn into a nightmare. Some states even have lender networks set up to report such activity in order to prevent it. Most borrowers will be able to get a $5,000 bad credit loan without doing this.