Asset Backed Loans

Asset backed loans are simply loans on something that can be taken back.  These are probably the easiest of the loans you can tackle.  Getting a car loan with bad credit isn’t too bad if you can convince the finance department you have income enough to pay the loan.  Bring proof of income like paystubs, IOUs, contracts, dividend income, etc so you can justify the payment you require.  Used car lots often finance their own cars to encourage sales.  You should be able to find very new cars at some of these lots and they will be much more willing to look passed the bad credit report.

Getting a home loan with bad credit used to be easy until the recent US housing meltdown.  You’re going to need to do what you can to scrub your credit report before you apply.  You can use one of the free credit report online companies to get your credit and check for any inaccuracies.  If you find any send a certified letter to the reporting agency stating the inaccuracy.  If the creditor who reported doesn’t get back with the credit agency the bad mark will be dropped.   If your credit is really bad, a down payment can help a bank overlook the bad credit report.  If your credit is really, really bad you can consider a lease to own program where you pay slightly higher rent and when you buy the extra rent is counted towards your down payment.

Personal Loans

If you need help getting a personal loan with bad credit the best place to start is with your local small town banker.  Do not go to one of the mega national banks they will not look past your credit store.  Find the smallest bank that has been around a long time.   Bring with you a written plan on how you will pay the bank back every dollar amortized over the whole life of the loan.  Dress professionally and polite wait to speak with a banker, not one of the tellers.  Tell them the whole story of why you need the loan and how you’ve already changed your finances to prepare for this loan.  You may have to go to two or three of these banks, but it should work for you.

If getting a student loan with bad credit is your problem you best help is the federal government.  The government gives PELL grants and guarantees loans for students of all income levels.  If you’re over 25 or married you should get some loan and grants from them.  If you’re under 25 you might have to convince a parent to cosign the loan.  Beyond that speak with one of the big national banks in this case because they know all of the programs from the government to get them to guarantee the loan you take.  If the government guarantees the loan they don’t care about your credit score.

Business Loans

Getting a business loan with bad credit requires the most preparation of all.  You need to write a full business plan including your mission statement, planned cash flow for the duration of the loan, expected profit/loss statements, marketing plan, hiring plan, assets you are adding to the business, and your staff’s qualifications at a minimum.  Don’t skimp on this part because your credit score good or bad won’t carry you too far.  When it comes to a business loan the banker wants to know you won’t get tired and quit six months into your project.  You need to sell the banker that this is what you were meant to do and they will make money with you along the whole way.   For the business loan application I would spend 80% of my time on the business plan, 10% of my time on my presentation, and 10% of my time paying off any small debts to clean up my credit record.

Getting a Loan Summary

The best way to actually get a loan with bad credit is find the people who are willing to listen to you.   Some lenders like the small bank or small used car lot are more motivated to give loans than the National banks.  These motivated lenders will overlook the bad credit report if you have a plan of action. For the long run, you will definitely want to work on building up your credit by doing things like making sure you pay all of your bills on time and not to have more than 50% of your credit limit used up. Whether this means to dramatically cut down on your expenses or even to get a second job in order to pay more of your debt down, it’s something you will want to consider doing.

By steadily increasing your credit score over time, you will be in a better position of getting a loan. As you may already know, getting a loan with bad credit isn’t exactly a walk in the park. In order to avoid this situation, you will want to plan ahead and do what you can to boost up that FICO score. You will also want to check and make sure that your credit history is clear of any mistakes that may be hindering your score. Being able to get a loan is something that can really make a difference in the quality of your life so it’s always a good idea to work on making your credit as good as possible.