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Many Americans are seeking out bad credit loans due to their poor credit history.  Now whether that loan is worth getting depends on whether the interest rate and other costs that go with it make sense.  With that being said, if you want to build up your credit score you are going to need to get a credit card or a loan.  As you start paying it off with timely payments, you will begin to see your credit score go up.

Here are 10 bad credit loans for those with poor credit

Personal loans for bad credit

Not the greatest option but it may be the only one you can qualify for.  These loans are not hard to get but they do come with a higher interest rate.  Be prepared to make those payments in full and on time.

Home equity loans

If you own a home, a HELOC may be a good option if you have bad credit.  You do need to have some equity built up in the home but the process to get one is not too bad. The interest rate does tend to be higher on these loans.

Loans from a credit union 

Being a member of a credit union has some great benefits.  You get access to better interest rates and terms compared to traditional banks. They are also more lenient when it comes to their credit standards for loans.

Co-signed loans

If you can find a family member or friend who will cosign a loan for you, great.  You will have access to a loan with a better interest rate but make sure you can make the payments.  If you fail to make the payments, the debt will fall on your loved one or friend and both your credit scores will be negatively affected.

Borrow from a loved one or friend

Just like with a cosigned loan, you are getting someone to agree to let you borrow money. Your credit will not be involved and you bypass the need for a bank approval.  You just need to come up with a reasonable interest rate and the length of the loan.  Of course with this type of loan you are not helping your credit nor potentially damaging it. On the flip side, if you don’t keep up with the payments, you can ruin your personal relationship.  Just be sure to draw up an agreement that states the details of your loan.

Peer lending

With peer lending, you are given a loan through online services that match up lenders and borrowers.  They are a fairly new option but something worth looking into. This is an attractive option since you don’t need to use a credit union or bank.  A service will match you and a lender and you can expect the loan rates to be affordable.

Secured loan

You need to have access to some sort of collateral to get one of these loans.  By using your vehicle or home. you are more apt to get a loan if you have poor credit.  Interest rates are usually lower but you may get a longer period to pay back the loan.

Payday loans

These types of loans are not the best but in a pinch, they are an option.  Payday loans let you write a personal check for the loan amount plus a fee.  You then have access to the cash right away.  The check is then held onto until your next payday when they will deposit the check.  The downside is interest rates are high and if you don’t pay the loan in full by the due date, you will get hit with additional fees.

Title loans

If you own your car outright, this might be an option.  The title of your car is put up as collateral to the lender.  Title loans will let you borrow up to the appraised value of the car and terms are usually 30 days or less.

 A loan from your 401k or other retirement account

Borrowing against your retirement account is an option, but it should also be a last resort.  If you do withdraw money, you will pay a bunch in taxes as well as early withdrawal penalties.  If you do go this route, make sure you take out a loan and not a distribution that way you bypass taxes and penalties.