The condition of knowing where to borrow money with bad credit usually arises when a person has made late payments or missed them altogether. As a result, their credit score significantly takes a dive, which completely affects their credit history and their ability to borrow money from traditional sources of funding. The bad credit rating would normally be enforced for at least six years, which can be quite difficult for those who have delicate financial conditions.
The condition of bad credit can actually happen with the most simple of financial obligations like missing out on mobile phone payments or not promptly settling your utility bills for example. It is therefore not surprising that during the past six months; about 6.25 million were denied their credit application because of their low credit scores. The good news is that it is still possible to source funds externally, as long as you know where to borrow money with bad credit, like in the case of the following;
1. Traditional Financial Institutions
Majority of money experts would disagree with this first option because traditional financial institutions usually frown on borrowers with bad credit. The important thing that many people miss out on is that there is a way to borrow funds without necessarily being directly affected by your current credit standing. This will allow you to secure funds from traditional financial institutions with relatively reasonable interest rates.
The first way to go about it is to use a property you own as collateral. Providing traditional financial institutions with substantial collateral will give them the peace of mind that their money is secured. Understand though that usually, you will only receive a percentage of the value of your collateral and not its entire worth, this is part of the protection mechanism of traditional financial institutions to ensure that they take minimal risks.
The second way to go about it is to look for a cosigner for your loan. The ideal cosigner is someone who is known in the traditional financial institution and has a substantially good credit history. The cosigner will assume the responsibility for the loan in case the main borrower falls in default. This means that the money that you borrowed will always be protected no matter what happens.
The good thing about this is that should you be able to maintain prompt payments of the loan, you can be sure of improved credit standing, which will allow you to take out a loan in the future without the need for a cosigner. You may also receive longer repayment periods as well as better terms and conditions for the loan. There is also the possibility of being able to apply for a substantially larger loan amount in the future with lower interest rates and fees. Now you know where to borrow money with bad credit.
2. Credit Card Cash Advance Facility
This is one possibility that is often overlooked by many people with bad credit. Perhaps it is because they have the wrong notion that if they continue to use their credit cards, the lower their credit score becomes. The reality though is that using your credit cards will only have a substantial effect on your credit rating if you fail to meet the monthly payments for your purchases promptly.
The reality is that as you look where to borrow money with bad credit, the solution is right there in your wallet. Your existing credit card is an excellent source of emergency funds. You should take advantage of the fact that issuers allow credit card holders to withdraw a substantial portion of their credit limit from cash machines much like they would use a credit card. The average APR for credit card cash advances is 29.92%.
To ensure that you are properly using this facility to rebuild your credit rating, you must get a copy of your credit report. This will give you a proper idea of your credit score and how much you need to achieve to have an acceptable credit rating. This also gives you the chance to meticulously review your credit report for any errors or discrepancies that may affect your credit standing.
These are two practical and acceptable places where to borrow money with bad credit that will be of good use once you are in a financial bind.