Finding affordable loans with bad credit can be incredibly difficult. There are not a lot of lenders out there that are willing to deal with people who have a record of being late to pay their bills, or even defaulting on them. For this reason, if you want to take out a loan, you will need to be able to prove that you have the income required to make the repayments. In some cases, if your credit is very poor, then you might also be asked to name someone else as a guarantor before you can take out a loan.
However, there are some ways to get loans with bad credit from places like credit unions – these tend to be limited to specific groups of people (Residents of a community, ex military people, alumni, or people who save with a certain group), but if you meet their requirements then they may be sympathetic to loaning a small amount over a reasonable period of time, for a good reason such as emergency bill payments.
Credit unions are the most affordable way of borrowing for people who cannot access an authorized overdraft or a loan with a mainstream lender. If they are not an option then after that you are looking at things like credit cards and cash advance loans, which carry very high interest rates so are far from ideal.
It is easy to fall into a trap with sub-prime lenders, borrowing more than you can afford to pay back then rolling over the loan over and over until you eventually owe more than you earn in a pay period. If you default on a loan then your credit rating will get even worse, and you will not be able to access affordable credit until the defaults drop off your credit rating. To avoid this, make sure that you borrow only the amount that you absolutely need, and spread the payments over a long enough period that you will be able to afford each installment.
It is easy to preach that people should never borrow more than they need, and that they should try to cut their outgoings and raise their income, but that is not always practical. However, the advice is sound. Think about every penny that you spend – do you really need that item, or only want it? Save when you can, so you don’t need to borrow.