Nobody is foolish enough to think that getting a $5,000 personal loan with bad credit is a mere formality. Whether banks or online lenders, lending firms and institutions have lending policies with clear criteria and conditions that applicants must meet. This is why a poor credit history does not automatically mean rejection.
The important fact to keep in mind is that securing loan approval, even with the specter of bad credit scores, comes down to the a range of other aspects. And if these are not in order, then rejection is almost assured. This is why it is necessary to think outside the box when deciding who to approach for funding.
Even when looking for a modest sized loan, like $5,000, there are many lenders who set strict terms, thus making it difficult for applicants to afford the repayments. But there are alternative sources for personal loans, sources that are more flexible and more likely to approve an application.
1. Keep It In The Family
This is probably the least expensive loan source around, though admittedly this does depend on the terms agreed. The process of getting a $5,000 personal loan with bad credit is straightforward, with a private conversation with your parent, brother, sister or other family member resulting in the loan sum.
There are many positives to this loan option, not least the fact that securing loan approval is as straightforward as the family member confirming they have $5,000 available to lend. And, family ties mean the lender can trust the borrower completely. For the borrower, interest is often not charged at all, and should repayments become a struggle, negotiating a new repayment schedule is easy.
Still, is important to set out the terms of any loan to save any confusion later. So, be sure to write down the terms of the personal loan agreement clearly and have both parties, and witnesses, sign it.
2. Student Options
This is a solution only open to college-goers, but that is not to say it is not a viable one for those who qualify. Often, students find it extremely difficult to secure a $5,000 personal loan with bad credit from regular lenders due to their income and employment status.
But securing loan approval can simply be a matter to going through student channels rather than independently to private lenders. Federal and private loan options are available to them. Of course, federal loans have the best terms, with government sponsorship helping to maintain low interest rate.
Private loans for students typically come with a period of grace, meaning repayments are deferred until graduation. This makes this kind of personal loan more affordable, in the short term at least. Graduation will bring the pressure to begin repayments.
3. Fast Cash Payday Loans
Extra funds may be needed to deal with a financial problem immediately, so getting hands on the cash without delay is the only option. With a payday or cash advance loan, applicants can get a $5,000 personal loan with bad credit as quickly as in a few hours.
These loans are given on the condition they are repaid in full on the next pay day. In return, there is no credit check carried out, and the cash is deposited into the account of the borrower in lightning speed. What should be consider though, is that securing loan approval comes with a serious price. Interest rates are as high as 30%, and repayment periods as short as 14 days.
Also the loan limit is generally restricted to $1,500, though some lenders may grant $5,000 and agree a repayment period of perhaps 180 days (6 months). And, the interest will make the personal loan very expensive indeed.