Whether you’ve missed payments on a credit card or claimed bankruptcy, having bad credit can affect many aspects of your finances. When your credit score dips below 600, you have bad credit. Many lenders will be less likely to approve bad credit loans because they’re concerned that you won’t be able to pay them back. They don’t want to be left in the red.

If you need to check your credit score or help with building it up, CreditSesame can teach you what you need to know for free based on your score. Plus, one of our trusted partners, myFICO, offers credit reports for the three bureaus. Since multiple bureaus can have different items on the report, checking all three scores and monitoring your credit can help you control your future finances.

While some lenders will flat-out refuse to give you a loan if your credit score is low, others will agree to work with you. But this will come at a cost. Interest rates for bad credit loans are high — often over 20 percent.

So How Can I Get a Loan With Bad Credit?

When you need a personal loan, either in the long term to pay off debt or in the short term to cover your bills, be wary of predatory scams. For example, payday loans are notorious for trapping people in a vicious cycle of debt in which they’re unable to shake the need for fast cash. Even so, there are ways to get a loan with bad credit:

  1. Peer-to-peer loans
  2. Credit unions
  3. Friends and family
  4. Cosigners

1. Get a Peer-to-Peer Loan

There are many companies — such as LendingClub, Prosper, Peerform, and SoFi — that help borrowers connect with individual lenders. These companies tend to be transparent about their fees.

Although your credit score is part of your profile, these lenders are more likely to offer help based on your personal story than your score.

The member testimonials on many of these sites reveal that people were able to pay off much of their credit card debt at lower interest rates as a result of receiving a personal loan for bad credit. But before you sign on to any of these sites, make sure to research them in depth.

2. Apply to a Credit Union

Credit unions may be more likely to give people bad credit loans than traditional banks because they're owned and managed by their members. Profits made from interest and investments are returned to the members rather than sent to shareholders, as they are in traditional banks. You can find a credit union near you by visiting aSmarterChoice.

3. Ask Friends or Family Members

Borrowing from friends or family may not work for everybody, but for some, it could be a great way to get a loan without the hassle of interest rates. Whether you're looking for $50 or $500, your friends or family may be able to help. You may also be more motivated to pay back a friend or a family member in a timely manner to avoid harming your relationship.

The downside is that this strategy will not improve your credit score. On the other hand, it won’t damage your credit score, either. But if you fail to repay your loan, you may lose a friend in the process.

4. Get a Cosigner

Short of obtaining a loan from a friend or a family member, you can ask a trusted loved one to cosign a loan for you. He or she will be legally responsible for it, but you’ll be able to get the money you need and work to pay it off, motivated by the desire not to affect your relationship adversely.

Final Thoughts on Bad Credit Loans

Getting a loan with bad credit isn’t impossible, but it’s not easy, either. If none of these options pan out — and even if they do — you need to work on improving your credit. Check your credit score for free at Credit.com and get a copy of your free credit report at annualcreditreport.com. Pay your bills on time, even if you can only afford the minimum payment. You can also make small payments over the course of the month.

Meanwhile, don’t use most of your credit and don’t close your accounts. Instead, use small amounts of credit and keep your accounts open, even if you don’t use them to grow your credit history.