Heightened regulations and tighter internal controls by lenders have contributed significantly to a tough lending climate.

Having bad credit makes you a high risk customer to major banks, credit unions and other major lending institutions.

Bad credit lenders provide finance to individuals with bad credit records.  The loans offered come with higher interest rates as well as lower limits.

When deciding on the loan amount to grant individuals, bad credit lenders take a number of factors into account, such as:

  • Your job
  • Salary
  • Assets
  • Stability

What constitutes bad credit?

  • Missed payments
  • Late payments
  • Bankruptcy
  • Lack of credit

Ways to improve bad credit:

  • Space out your applications for credit
  • Keep up repayments. By paying on time, you will be on the road to repairing your credit record.
  • Check your credit record and contest any errors
  • Pay all your outstanding debts

Various types of bad credit lenders:

Credit unions

Credit unions are member-owned financial cooperatives that are democratically controlled by members. They are operated for the purpose of providing credit at competitive rates as well as providing other financial services to their members.

Credit unions may be willing to look beyond a poor credit record.

Family and friends

When you have a bad credit record and can’t get assistance from a conventional lender such as a bank, a private loan from family and friends can help.

Get a co-signer

By getting a co-signer, you may be able to get access to the funds you need to meet your financial needs. This individual needs to have a good credit record and should be willing to pay your loan on your behalf if you are unable to do so.

Consider peer-to-peer lending

Peer-to-peer lending is a process whereby an online platform is used for other consumers to provide capital which is lent to those requiring a loan. An online platform is used to connect borrowers with people who have money to lend.

Also known as social lending, peer-to-peer lending services a sector of the financial market that may face an uphill battle when seeking finance from traditional lending institutions.