Getting a loan is often the only way you can make large purchases. When you need a costly necessity, you don't have much of a choice. Having bad credit makes you look like a risk to lenders, and they're usually hesitant to take a risk by lending to you. If you have bad credit and you're trying to secure a loan, here are some tips that may help you. 

Know Your Credit

Many people with bad credit don't like to look at their credit score. It's important to know how bad it really is. A credit score of 580 makes a huge difference versus a credit score of 380. Some loans will advertise how high of a credit score you need in order to be considered. Knowing where you stand will keep you from wasting your time applying for loans that you will never be approved for. 

Start With Your Bank

If you have been with your bank or credit union for a long time and have created a good standing relationship, they may be your best bet. If you have had a steady job with constant direct deposits, and keep your bank account balance high, your bank may not put as much stock into your credit report as other creditors do.  

Check Credit Report Suggestions

Many credit report web sites have suggestions near your credit score. The suggestions that they offer are types of loans and credit cards that you should apply for due to your credit report. The suggestions are there because those types of loans and credit cards are often obtained by people with your credit score. That is always a good place to start. If you can secure a loan for a lower amount and a credit card based on your credit report suggestions, the two together may give you the amount of money you need, or at least the majority of it. 

Home Equity Loan

If you own your home and have some equity, applying for a home equity line of credit is a good option. Even with bad credit, you can secure a loan that has low interest, and is tax-deductible. Before jumping on this line of credit, be sure you consider your risks. Don't tap into your equity unless you have reliable income and you aren't in any danger of not making your payments. Missing your payments will put your home at risk, and with bad credit, that is something that you may not be able to fix. 

Peer-To-Peer Lending

Try to secure a loan from a peer-to-peer lending service. This is a situation where people sign up to borrow money from other people. Individuals with high incomes often invest in peer-to-peer lending to strengthen their investment portfolios, because it returns better profits than investing in old industries. Borrowing from a peer-to-peer service will give you a lower interest rate and offer more flexible terms than lending giants will while considering your bad credit score. 

Find A Co-Signer

If you're looking for a loan, your family and friends probably can't loan you money. However, that doesn't mean someone isn't willing to co-sign a loan for you. Sit down with a family member or close friend and discuss your options with them. Let them know why you need the loan and your plan to repay it. If you have all of the details worked out, they are more likely to consider co-signing.  

Find A Collateral Loan

If you have the title to your vehicle, or have other assets you can use, find a loan that takes collateral. Many lenders look past credit when you have something of value that they can acquire if you don't make your payments. The higher the value of your collateral, the easier the loan will be to obtain. 

Having bad credit makes obtaining a loan difficult, but it doesn't make it impossible. Know that you have personal loans options and consider all of them. Don't jump into the first loan that is offered to you because you think it will be the only one. Once you have explored all of your options, choose a loan with the best terms that you can afford.