Whether you’ve missed payments on a credit card or claimed bankruptcy, having bad credit can affect your financial future.

When your credit score dips below 600, you have bad credit. Many lenders are less likely to approve bad credit loans because they’re concerned that you won’t be able to pay them back. They don’t want to be left in the red.

If you need to check your credit score or to get help building it up, CentSai can teach you what you need to know for free. Since multiple bureaus can have different items on the report, checking scores from all three bureaus and monitoring your credit can help you control your future finances.

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When checking your report, look for errors and instances of identity theft. Also look for ways you can improve your score over time. But given that the credit repair process can take months, how can you get a loan with bad credit if you need cash now?

Getting a Loan With Bad Credit

So you need to borrow money, but your credit sucks. Don't sell your pet just yet. Check out these tips for how to get a loan with #badcredit .. #improvecreditscore #creditscore #bettercreditscore #buildcreditscoreWhile some lenders will flat-out refuse to give you a loan if your credit score is low, others will agree to work with you. But this will come at a cost. Interest rates for bad credit loans are high — often more than 20 percent.

When you need a personal loan, either in the long term to pay off debt or in the short term to cover your bills, beware of predatory scams.

For example, payday loans — whether a storefront or online — are notorious for trapping people in a vicious cycle of debt in which they’re unable to shake the need for fast cash. What’s worse, these payday loans can charge annual interest of up to 400 percent, according to the Consumer Finance Protection Bureau (CFPB).

So let’s look at some alternatives. Here are a few ways to get a loan with bad credit.

1. Get a Peer-to-Peer Loan

There are many companies that help borrowers connect with individual lenders. These companies tend to be transparent about their fees. Although your credit score is part of your profile, these lenders are more likely to offer help based on your personal story than your score.

The member testimonials on many of these sites reveal that people were able to pay off much of their credit card debt at lower interest rates as a result of receiving a personal loan for bad credit.

Before you sign on to any of these sites, make sure to research them in depth. Also, make sure to understand the terms of the loan and the interest rate you will be charged.

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2. Apply to a Credit Union

Credit unions may be more likely to give people bad credit loans than traditional banks because they’re owned and managed by their members. Profits made from interest and investments are returned to the members rather than sent to shareholders. You can find a credit union near you by visiting aSmarterChoice or MyCreditUnion.gov.

When taking out a loan, be honest with yourself about your ability to pay it off.

You should also assess whether your need for a loan is a consequence of a real emergency or if it’s a product of an unbalanced monthly budget.

“If it is a short-term emergency, a loan may be the right solution,” says certified financial planner Jason Ball of Ball Comprehensive Planning. “But if it’s a structural, high fixed-cost issue, look first at lowering your fixed costs, such as ways you can reduce your budget.”

Analyzing your monthly money habits, and whether your financial duress is a consequence of spending too much on rent, food, or other expenses can help you decide if a loan is the best financial decision; if your fixed costs are too high and you take out a loan, you may find yourself in the same position next month, which could lead to accumulating more debt.

3. Ask Friends or Family Members

Borrowing from friends or family may not work for everybody, but for some, it could be a great way to get a loan with bad credit, but without the hassle of interest rates. Whether you’re looking for $50 or $500, your friends or family may be able to help.

You may also be more motivated to pay back a friend or a family member in a timely manner to avoid harming your relationship.

Heck, some family members even use this as a lesson in financial literacy.

They ask their relative to pay back the loan at a certain interest rate. Obviously, that’s between the two parties and what seems right for the circumstances.

Also, the downside is that this strategy will not improve your credit score. On the other hand, it won’t damage your credit score, either. But if you fail to repay your loan, you may lose a friend in the process.

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4. Get a Co-Signer

Short of obtaining a loan from a friend or a family member, you can ask a trusted loved one to cosign a loan for you. He or she will be legally responsible for it, but you’ll be able to get the money you need and work to pay it off, motivated by the desire not to affect your relationship adversely.

Final Thoughts on How to Get a Loan With Bad Credit

Getting a loan with bad credit isn’t impossible, but it’s not easy, either. If none of these options pan out — and even if they do — you need to work on improving your credit.

Check your credit score for free at AnnualCreditRepair.com. Pay your bills on time, even if you can afford only the minimum payment. Small steps to improve your credit history and lower your credit utilization rate can help you prove yourself as a reliable borrower, and improve your ability to get a crucial loan in the future.

Want to learn more about personal loans? Check out our ultimate guide to how personal loans work.

Additional reporting by Connor Beckett McInerney.