- Personal Finance
$5000 Loan For People With Bad Credit
This page is part of my series on getting loans when you have bad credit. Before I get started I want to throw out a huge disclaimer: not every person with bad credit is going to be able to get a loan. That said I want to educate you on what can be done based on your current circumstance.
In this economy, there are tons of people that are you broke and out of money. Are you behind on your bills and have bad credit? Before you go too far into this lesson I want you to figure out how far behind you are on all of your payments. Exactly how much money are you going to need to get out of the financial pickle you're in? If you need $5000 or less, this article is for you. If you need more, I'll point you to some other articles that may be able to help you out.
If you need $5000 to stay afloat, you're not that different from millions of people in this country. I don't want you to feel sorry for yourself. I personally let my spending get a little out of control during the last big economic boom and now I'm paying for it. I wish that I had been a lot smarter about how I did things.
Fortunately my credit wasn't too dinged up but I do understand what it's like to have bad credit. The first time I checked my credit my score was about 530 if I remember right. It was for sure under 550. It's embarrassing to tell you that but even I was able to get it straightened out.
In most cases people are living beyond their means and for that reason alone they are not able to make payments and consequently end up with bad credit. If you have a boat, three cars, a motorcycle, and a house that represents twenty years of your salary then you are living way beyond your means if you need a 5000 loan for people with bad credit. If this is you then it is time for a financial reckoning day.
Go get a copy of every bill and debt that you have outstanding and look at your average dollar weighted cost of capital. Basically take the dollar amounts of your debt and then average out the interest rate you pay to get a true picture of your cost of capital. Businesses do this and so should you in order to better account for your outflows.
Once you know how much each of your debts costs go through and figure out what you can get rid of to minimize your debts, improve your credit score, and maybe start living at a level that you can sustain without taking out the $5000 loan.
If on the other hand you are one of the few, the proud, the people that just had an emergency but are otherwise making your payments your job in getting the loan will be a lot easier. You only have to go into the bank, explain the situation, fill out the forms, and see if they will lend you the money. If they will not then you may be able to go to an alternate lending service that specializes in loans for people with bad credit.
There is one caveat when using outside lending services and that is you will end up paying very high rates of interest and suffer steep penalties if you miss or are late on a payment. So make sure that you have a way in which to pay it off relatively quickly or you will find yourself in an endless pit of debt.
If you need more than $5000, you should take a look at what I have to say about getting a $10000 loan for people with bad credit.
The rest of this article will be dedicated to helping you to see what options you have for a $5000 loan.
Signature Bank Loan
Some banks will allow you to get a $5000 signature loan if you have good credit. If you don't, you'll have to get a cosigner or provide some type of collateral. If you want to know if you can qualify on your own, visit my article on signature loan requirements. It will help you to know whether you're a good candidate. If you can't, ask a family member to sign for you at the bank.
If you decide to go this route, make sure that you use a solid bank. I personally would go with one of the strongest banks. If you want to read about such banks, you should visit my information on Wells Fargo signature loans.
Private Personal Loan
If a bank loan isn't an option, it's time to hit up your friends that have money. Honestly if you're worried about not being able to pay them back, you shouldn't be getting a loan in the first place. Finding personal loans isn't that easy but you need to start asking friends. I'm sure that you're already aware that getting $5000 loans with bad credit isn't the easiest thing in the world. You're probably going to have to ask a lot of people and sometimes it's hard to swallow your pride.
Another solid option is to sell some things to your friends. If you have bad credit and need personal loans, you should probably take a look at this article: personal loans for people with bad credit.
Home Equity Loan
This option isn't going to be the best option for most in this economy, unless you have owned your home for more than 10 years. Why? Because there isn't much equity in your home if you bought recently. In case you have been living in a cave, the real estate market in this country blows right now. However, if you want to know if you're eligible for this type of a lend you can take a look at my home mortgage loan requirements.
$5000 Loan No Credit Check
There's another type of loan that people often search for and that is a fairly large loan (of around $5000) with no credit check. That might not seem like a huge loan and it really isn't, but borrowing that much money without having your credit checked isn't common.
There actually aren't very many different loans that you can get that are like this, but I do know of a few. One loan that's like this is the secured auto loan that you can often get from no credit check car dealerships. They don't check your credit at all and allow you to buy a car on loan from them. However, these loans are secured by the car so you aren't really borrowing cash, you're getting a car.
Getting A $5000 Loan Today
If you really want to borrow $5000 and have the cash on hand today, a few things are going to have to line up. First of all you're going to have to have a job and good credit. I don't see you securing a bad credit cash loan of $5000 within one day. If you have solid credit and a job you can probably walk into a bank and get a signature loan.
These loans are unsecured which means you don't need collateral to get them. It also means that you'll be paying interest that's higher than it would be if you were to get a home equity loan, or an auto loan. You can expect to pay around 11% interest on your signature loans.
What To Expect When Getting A $5000 Loan For Bad Credit
With this type of loan, you can expect interest rates to be high, especially if you have to get a loan without collateral. These loans are called signature loans and generally cost around 11% interest even if you have good credit. If you have bad credit, you can expect your rates to be closer to 15%. Yes that's pretty expensive for a loan and approaches credit card interest so the best thing to do is to fix your credit. You should also try to avoid getting these loans altogether if possible.
Advice For People With Bad Credit
If you have bad credit, trust me I feel your pain. I know what it's like to struggle with bad credit. It's really hard to get out of. I personally struggled with it for years and hope that I can help you out. Here are some articles that I have put together, just for you:
- Auto loans for bad credit
- Getting FHA loans with bad credit
- Credit cards for people with bad credit
- Bad credit loans with no collateral
- Finding loans when you have bad credit
Do let me know if you're struggling with anything in particular. I would love to help however I possibly can and please know that someone knows what you're going through.