The first line of defense for those who are suffering from bad credit and feel overwhelmed by their current interest rates is bad credit loans. These loans allow applicants to consolidate their various debts into a single loan with a lower interest rate, therefore streamlining the repayment process and reducing monthly payments.

When you have bad credit loans or no credit, it is tough for you to get additional loans because you are considered a high-risk client who might not repay the loan. The way the financial industry works, especially when it comes to the loaning business, you have to raise your credit score to be in the group of people who have met the lending guidelines that banks follow.

If by any chance banks have declined your request for a loan, or you do not want to get yourself loans that have very steep premiums, we are going to look at five different ways that you can still get a loan with a bad credit score.

Apply for a loan in credit unions

An alternative lending institution that you can use is credit unions. Credit unions are similar to banks, but the only difference is that they are owned by members who have a particular goal. Credit unions work to provide members with benefits such as having lower rates.

Visit a credit union near you and discuss with them how you can get a personal loan. You can visit several credit unions to check the one which has the lowest interest rates before you settle on one.

Use a home-equity line of credit

It is possible to get tax-deductible low-interest line of credit if you have a lot of equity in your property. It is not a great idea to tap into the home equity if you are not able to repay the debt. But if you are working a stable job and you are disciplined on paying the equity line, then it is a cheaper alternative even if you have a bad credit score.

Go for a peer to peer loan

P2P lending has been active in the last decade. This type of loaning system has nowadays gone online where you can borrow money from individuals instead of borrowing from a lending institution. P2P lending is a hot market because it does not have a lengthy process, and it is advantageous on both sides of the rope. The borrower gets low interest and the investor earns higher returns.

The process for P2P loans is generally as follows; borrowers post a loan-listing which includes the reason why the loan is required and the amount needed. The loan listing is reviewed and investors select the ones that meet their criteria. The applicants are then verified. Although the credit score is a factor, an individual lender can be lenient or empathetic enough to the reason you need the loan.

Take a loan from your friends or family

If you find it hard to get a loan from your peers, then you can try your friends and family. The tricky part with this type of loans is the lack of seriousness when borrowing from them. It is important to make a clear documented legal record of the loan so that the friendship is not compromised.

If you want to avoid complications, sign a proper agreement that has the terms of payment, interest rates, and the collateral that is in place of the loan in case you are not able to repay the loan. Seek the counsel of a lawyer when going for this type of loans.

Ideally, the last resort should be the family loan, but in this respect, ensure that you have do not jeopardize the relationship you have with your family because of money.

Use a co-signer

If you are not lucky enough to get a loan from a friend or family member, get someone who can co-sign with you on a loan. If you have the ability to repay bad credit loans, it is possible for someone who really knows you to take a chance of supporting you by co-signing. The only thing that should be in your mind is that in case you default, the creditor will demand full repayment from the co-signer.

You don’t want to make your co-signer suffer for your loans because you have not been able to repay. All the payment details will be recorded on the credit reports of the co-signer alongside yours.

In summary, in case none of these options pans out, you can work on raising your credit score for you to get a loan on in the traditional way.