Having a bad credit score can make it incredibly tough to get a loan. In fact, if your credit score is anywhere around 550, then getting a loan at decent interest rates is next to impossible. However, all is not lost since there are certain loans that you can be approved for even if your credit score is weak. And below, we look at seven different types of loan that you can get even with a bad credit.


If you own a home and have some equity in it, you can apply for a HELOC loan. The loan amount will be dependent on how much equity you have in the home. For instance, if your house is valued at $200,000, and your equity is about $70,000, then you can get a HELOC. However, do keep in mind that you will need to have an LTV ratio of at least 20%. Else, you are less likely to be approved for this loan. Plus, interest rates on a HELOC will be higher than a refinance loan.

2. Credit Union Loan

In case you are a credit union member, you can apply for a personal loan with them. A plus point of credit union loans is that you can receive lower rates and better terms when compared to the big banks. This is mostly because credit unions are essentially not-for-profit entities. As such, they don’t charge you anything more than what is required to keep the organization running. Moreover, you are likely to be judged by a more relaxed credit standard.

3. Retirement Account Loan

If you have an active retirement account, you can get a loan against it. On the downside, you will have to deal with withdrawal penalties. Higher taxes can also affect the loan and raise its cost. The easiest way to deal with this will be by opting out of a straight distribution. On the positive side, borrowing against a retirement account like 401(k) essentially means that any interest you pay will only be to yourself.

4. P2P Loan

A P2P loan is one that is offered by individuals like you and me. There are many online P2P services that will match loan providers with people who are in need of credit. You can get loans at lower interest rates with the P2P option since they are mostly provided directly by individuals and not by any big companies. In fact, even with a poor credit score, you should be able to get a loan at competitive rates through the P2P channel.

5. Payday Loan

You can also take a payday loan in case you are in urgent need of cash. There typically won’t be any credit check involved to be eligible for the loan. As the name suggests, the only criterion is that you should have a job that pays well. You will be able to write a check for any amount that you want as credit. A fee will also be included in the check. This will be held on by the lender till your next payday. And then, the loan will become due. This is a good option when you need cash immediately without wasting any time. However, you might have to pay ridiculous interest rates for a payday loan.

6. Co-Signer Loan

Another great way to get a loan when you have a bad credit score is to get a co-signer. Provided that your co-signer has a good credit score, you can use that to get a loan at lower interest rates. Now, keep in mind that if you were to default on the repayment, then it will affect not only your credit score but also the score of the co-signer. Until and unless you are sure that you won’t put the co-signer into any financial trouble, it is better to avoid this option. Else, things can get really sour between you and the co-signer when you start defaulting on the repayments.

7. Secured Loan

If you have any asset that can be provided as collateral, you can take a secured loan against it. For example, a car should be able to get you a few thousand dollars in case it is debt-free. Similarly, if you have any gold jewelry, you can get a secured loan against it depending on the current prices of gold.  Valuable collectibles might also be considered for a loan depending on the lender. The benefit of a secured loan is that you can get it at a lower interest rate. But on the flipside, such loans tend to have a much longer term than other types of loans.