Life throws you lemons and puts you in situations you wish you were not in. Sometimes you need a little help financially, but you may feel as though you are unable to get help because you have bad credit. Fortunately, there are ways to get a loan even if you have bed/terrible credit, and I am not talking about PayDay loans, which I would advise you to stay away from no matter the situation. Below are a few tips to help you get a personal loan. Make sure you do your homework when researching, and always compare your options if you have them.

Inquire with an existing bank that knows you: If you do have a relationship with a bank, I would recommend reaching out to them first to see if they can provide you a loan. They may not be able to help, but sometimes smaller banks who know you will be more willing to help.

Use a home equity line of credit: If you have equity in your property, you could get a low-interest, tax-deductible line of credit to spend any way you like. You can get the funds rather quickly, and the rates are very good right now. Just remember your house is collateralized to the loan so if you default on the loan, the bank can repossess your house.

Credit cards: Credit cards do offer cash advances up to a certain amount. You are already “approved” up to a certain amount, and you know what the interest rate is. On the downside, credit card rates are very high. Be very careful if you ultimately choose this route as this may cause more harm than help you.

Friends/Family: Friends or family can be a viable option if you are really in need. However you need to be very careful with this situation as well. Trouble can come up very easily when you mix money with friends and family. You need to have a very serious discussion with them to understand what you are asking for and what they are getting in return.

Get a peer to peer loan: Peer-to-peer lending allows individuals through online services to borrower money from other individuals. Borrowers can obtain financing even with bad credit. There are fees associated with this kind of borrowing and if you do not have great credit, the interest rates can be very high.

​Financial advisors generally tell you to avoid getting personal loans. Those financial advisors are usually right, but there are some situations in which obtaining a personal loan may be a good idea. Below are a few situations in which getting a personal loan may be a good idea.

1. Need immediate funding – If you have to have immediate funding, for whatever reason, obtaining a personal loan can get you access to cash quickly, sometimes the same day.
2. Consolidating credit card debt – If you have a lot of credit card debt, at a high interest rate, a personal loan may be more appealing as it will offer you a lower monthly payment and a lower interest rate.
3. Refinance student loans – Some student loans carry very high interest rates. Your student loan interest rate may be higher than a personal loan. If you are able to get a personal loan with a lower interest rate, it will lower your monthly payment and you will pay less interest over the long-term. One important thing to note before you go down this path is student loans come with tax advantages so make sure you include that in your calculations.
4. Improve your credit – If you are trying to improve your credit score, a personal loan might help you. If your credit report shows mostly credit card debt, a personal loan will help your account mix. If you have different types of loans on your report, it usually helps you improve your credit score. It will also lower your credit utilization ratio, which is the amount of total credit you are using compared to your total credit limit. Obtaining a personal loan will increase the total credit amount available to you. Lastly, if you continually pay down the personal loan your history will also help you improve your credit score.
5. Starting a business – This is on the riskier side, but if you have a great idea and you do not have other funding options, a personal loan is a potential option. A personal loan is easier to acquire and has less stringent requirements compared to a business loan. Taking out debt to create a start-up business comes with obvious risks, but if you have done your diligence and believe in yourself, financing the business should not stop you.

These are a few reasons to potentially get a personal loan. Remember that a loan is typically for something you definitely need and should not be used for discretionary spending. Personal loan interest is also typically high, so make sure the loan is worth the cost.

As unfortunate as it may be, there are people out there who think they have no choice but to rely on the “services” of a loan shark.

While this may be the path of least resistance – at least upfront – you need to consider the long term impact of this decision.

Once you learn more about the many alternatives to working with a loan shark, you’ll find it much easier to efficiently manage your finances.

So, with that in mind, let’s take a look at three alternatives you should immediately consider:

• Credit card. This is easy enough. If you need to borrow money for any reason, such as to deal with an emergency, don’t turn your attention to a loan shark. Instead, learn more about the many credit card offers that you qualify for.
• Personal loan. A great alternative to loan sharks and credit cards, with a personal loan you gain fast access to cash. Even if you have less than desirable credit you could still qualify for this type of loan (albeit at a higher interest rate).
• Friends and family. It’s never fun to ask friends and/or family for money, but it’s a better option than working with a loan shark. You should treat this just as you would a bank loan, setting both a term and interest rate.

These are just a few of the best loan shark alternatives, but others exist. Again, you may have to do a bit more work, but there’s nothing wrong with that. Doing so will allow you to avoid a relationship with a loan shark, which is exactly what you’re trying to accomplish.

What are your thoughts on borrowing from a loan shark? Is this something you have done in the past? Do you regret your decision? Have you come to find that an alternative is the better idea? Share your personal experiences in the comment section below.

At first glance, you may assume that borrowing money from a loan shark is the best decision you can make. Even if you realize that it’s a risk, you could fall in love with the idea of securing a large amount of money with little to no paperwork.

However, this is never a decision you should make. Doing business with a loan shark can lead you down a dark path, including a situation in which you’re paying more in interest than you ever should.

While you may not like the idea of running up a credit card balance, there are many reasons why this is better than turning to a loan shark:

• It’s safer. Let’s face it: there is nothing safe about borrowing from a loan shark. These people don’t have to follow any rules and regulations, meaning they can do pretty much anything they want in regards to the loan. Not to mention the fact that you could find yourself in a sticky situation should you be unable to pay.
• Just as fast. Depending on your approach, you may be able to apply for and receive a credit card on the same day. This is just as fast as doing business with a loan shark.
• Many benefits. For example, you may qualify for a rewards credit card. This allows you to earn points for every dollar you spend. Also, depending on your credit score and history, your rate may be much lower than one from a loan shark. Once you compare the benefits of the two options, it’ll be easy to see that a credit card has much more to offer.

These are just a few of the many reasons to choose a credit card over a loan shark. As tempted as you may be to give your business to a loan shark, it never makes sense to do so. Chances are that you can find a credit card that offers so many more benefits.