6 Potential Places to Borrow Money with Bad Credit

Money makes the world go around, and it is a tactile currency we exchange freely. Besides the dollars and cents we carry in our pockets, the digital version transfers virtual cash through cards, apps and online bank accounts, and we make these transactions multiple times a day.

What happens if you run out of money? This can leave you in a bind that creates panic, but fortunately, there are solutions to your funding dilemma.

Here are six places to borrow money with bad credit.

1. Secured Loans

Getting a standard loan can be difficult when your credit is tarnished. While you may be able to find some lender that will do it for a high interest rate, that is not ideal because it just ends up costing you more in the long run. A better option is to secure the loan with a tangible asset you possess.

This is collateral that a lender sees as a fair security if you fail to make timely payments, and they are willing to lend you money based on the item’s value. Usually, it is a vehicle or a piece of property that makes the deal go through, and if you don’t repay the loan, they can repossess the security to pay off the debt.

2. Guarantor Loan

Another possible loan for bad credit is having a guarantor sign on. This could be a close friend or family member; basically, anyone who trusts you and will put their name on the loan will work. They need to qualify for the loan and have good credit to be of any benefit to you.

Remember that they are on the hook if you fail to pay, which can also damage their credit rating and ability to borrow in the future.

3. Payday Loans

Payday loans is a much simpler way to get a loan without credit. This is an easy process for obtaining funds and quickly gets cash in your hands for whatever needs you require.

A payday loan is a short-term fix and attaches to your regular earnings as a guarantee. You are securing the loan with your future earnings, and there is a flat fee for the service instead of an interest rate.

It can be based on your work income, child tax benefits, employment insurance or even a pension, just as long as it is a recurring payment. When you receive your paycheck, you must pay back all or a portion of the loan, based on the lender’s arrangement, or you may incur more fees or interest charges.

These are six effective places to borrow money with bad credit. Even if you have made a few financial mistakes and overextended yourself, you still can get the funding you need, so try these methods and be back in the cash again.

4. Cash Advance

If you need money quickly, you can borrow from your credit cards. This allows you to pull any available funds from your credit card to gain instant access to it in the form of cash. It will be limited to the available credit left on your card and subject to immediate interest.

Some policies even charge a higher rate for cash advances than regular credit card purchases, so beware and only use this method if you have real financial hardship. You also need an effective plan to pay it off quickly, or you will be saddled with expensive credit card debt.

5. Family and Friends

While you may have bad credit and no money in your savings account, a family member or friend may be the lifeline you are reaching for.

It can be difficult to ask a loved one for financial help, but it may be your only option. Remember, this is not a handout but rather a hand-up and a loan you must repay. They may or may not charge you interest, but as you complete a regular payment schedule, add another month to thank you. This goes a long way to show your appreciation and may even inspire confidence for the next time you need a loan.


Sometimes, you may have damaged your credit but still own a home that has accumulated equity over time. This can be a financial resource you can tap into in the form of a HELOC.

A Home Equity Line Of Credit is a financial product that allows you to borrow against your home’s available equity. This is calculated between the difference between your current mortgage balance and a recently appraised property value; from there, you will have access to a line of credit for up to 85% of that number.

The downside is you are using up your equity and run the risk of foreclosure should you fail to pay the loan. It also eats up your retirement nest egg and inheritance asset for your loved ones, so make sure it is the right arrangement for you before signing any papers.

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