How to get a loan with bad credit from a lender you can trust

People with bad credit often find themselves shut off from bank and mainstream credit loans. Can they still take out a loan? Vince wants to know.

“I thought that after paying off my overdue debts my credit score would be okay. I was wrong. I’ve been carrying this black mark for two years now. Banks are still turning me down because of some loans I failed to pay on time years ago. In case I should need cash in an emergency, I’d like to know how to get a loan with bad credit.” – Vince, Chicago, IL

Today even people with bad credit can take out small loans from a direct lender. This segment of borrowers is fueling the surge in the number of online loans–they’re likewise popular in the UK and Canada–where lenders promise quick and easy approval even for people with bad credit. Many lenders understand that there are borrowers who are financially better off now than they were during the recession because people are getting back their jobs.

In fact, try a simple Google search of “how to get a loan with bad credit” and you’ll get about 130 million results! The challenge is to find the direct lender that subscribes to, not only legal, but ethical lending practices. The Howard University School of Law defines predatory lending as having excessive fees, abusive penalties and kickbacks to agents, among others. Be extra vigilant to spot these unethical practices especially with loans that promote discounts or gimmicks.


The general requirements on how to get a loan with bad credit are quite simple. First, you need a steady income. It can be a job or a small business that you can prove to give you a regular stream of revenues. A utility bill or rent receipt to show you’re capable of paying monthly fees are often good enough as proof of income. Second, you need a bank account. If you’re taking out an online loan, the bank account is where the cash will be transferred. Third, you must be at least 18 years old to get approval from lenders.

Things to consider

Getting a loan is easy and quick, but before you sign up for one, consider the following:

Do you really need a loan? Small loans are expensive to pay back. The interest is often above industry average and the penalties are hefty. You’re better off if you can wait until your next payday.

If you need to take out a loan, make sure to get just the exact amount you need. When thinking how to get a loan with bad credit, also think how much loan you’ll exactly need to avoid paying up for more than what is necessary.

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Pay on time. Never default on payday loans, short-term loans and similarly type of small loans. A late payment can put you in a debt spiral where the borrower takes out another loan to pay for the previous one; or a borrower keeps refinancing the loan until he ends up paying as much as three times than the original loan.


Getting approval from a direct lender even with a bad credit doesn’t mean your cash problem is solved. It’s a temporary solution to your real problem: your bad credit score. Always pay on time no matter how small the loan is to gradually improve your credit.

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