People with bad credit are starting to outnumber people with good credit in the loan market today. With the stock market making crazy swigs and the recession threatening to double-dip, even responsible people have been dragged down in the fall. However, many of these same people with bad credit continue to need money. Personal loans are essential for many situations in life and if you need a mid-sized personal loan of $5,000 then there is hope for you.
In fact, a $5,000 personal loan with bad credit is a real possibility for many people. There are people out there who can and will help you out in your time of need. This article will review some of your best options for fining the $5K that you need.
First Stop: Home Bank
Many people with bad credit these days are embarrassed about their situation. While this is understandable, there is really no reason for this attitude, especially when speaking with the bank you already use. Do not just assume that they will deny your request for a loan.
Especially if you have been a loyal customer for some time and if you are dealing with smaller, local banks and/or credit union, asking about bad credit personal loans is worth it. There are many banks that will be willing to talk your situation out with you, and even if they cannot offer a loan they may be able to provide you with credit counseling that will improve your ability to get a loan in the future.
Next Step: Bad Credit Lenders
Many lenders are out there today who specifically cater to those with bad credit. Thought they still have some qualifications, such as current loans in good standing, they are more willing to forgive credit issues in the past if you show that you have reformed your ways. These lenders will work with you, though the interest rates that they offer are significantly higher than those offered at a personal bank or to those with good credit. Therefore, it is important to be prepared in terms of expectations when talking to these people.
Another Option: Comparison Shopping
The internet is an amazing place that offers marketplaces in many formats for people searching for basically anything. Prosper is a lending market online that allows users to search for a private loan (as in one offered by and individual or business) in an auction-like scenario. They offer low interest rates and through this service you may well find someone willing and able to help you. Though your credit score will be taken into account, Prosper makes its own score for you that may help you if your bad credit history was in the distant past.
Last Resort: Payday Loans and Cash Advances
These loans are often seen as a last option for those in need of cash because the interest rates run so high regardless of credit. Also, payday loans usually top out around $1,500 which will leave you needing to take out 3 or more loans to reach the $5,000 that you need. Finally, these loans are generally very short term. That is why they are called advances, the assumption is you are merely getting your paycheck in advance and will then use it to repay the loan immediately.
This is a viable option, however, if the money you need is a temporary fix and if you know you will be able to repay it. In fact, the responsible repayment of any loan (even a cash advance) can have a positive impact on your credit.
Weigh Your Options
As you can see, having bad credit is not the end of the world in terms of finding an adequate personal loan for $5,000. There are several options available to you and you need only look into how each will play out for your particular situation.