If you are looking for a 3000 loan with bad credit, your options are going to be limited. Of course you can always try to repair your credit before you apply for the loan, but if you need the loan quickly then this will not be an option.
Below we will look at your different options, with the goal to help you understand how you can go about securing a 3000 bad credit loan – and finding one that won’t cost you an arm and a leg in the process. As such, we list your options below in order of how much we recommend them (i.e. the most highly recommended number 1, least recommended at the end).
Option 1 – Personal Loan from a Bank or Credit Union
As always, we recommend first and foremost that you try to find a regular, personal loan. Not only are your costs going to be much lower than other options, but you will also have the most time to pay the loan back. However, there is one problem when you have bad credit – banks won’t typically lend to you. Aside from the subprime fiasco, banks are typically pretty stringent with their lending standards, so if you want to be able to secure a loan from them, there are two different things you are going to need to do:
- Secure the loan with an asset. The best way to help the bank look past your poor credit history / score is by offering some collateral to back the loan. By putting up some collateral you are offering to secure the loan with that asset – essentially this means that if you default on the loan the bank has the rights to take that asset from you. They can then sell the asset to recover their losses on the loans. In addition, you won’t want to lose your asset, so the bank feels more secure in extending the loan.
- Finding a third party co-signer. Probably the easiest way to make up for your bad credit is to find someone with good credit who is willing to sign on the dotted line with you. How this works is they sign on the loan document next to you, stating that if you fail to pay back the loan they will step in and be responsible for the payments. The bank then has the right to go after both you and the co-signer in case of default. Of course, you will want to find someone who has a credit score above 640, but a credit score above 760 is ideal.
Option 2 – Borrow money from Friends or Family
We don’t put this as the first option primarily due to the complications involved in borrowing money from those you know:
- It can be uncomfortable / awkward
- You have to find someone who has the money and is willing to lend it to you
- A default on your part can ruin the relationship
However, if you know someone who can lend you the money and you KNOW you can pay it back, then this is a much better option than taking out payday loans or other bad credit loans for 3000.
If you do decide to go this route, MAKE SURE YOU FOLLOW THE BELOW GUIDELINES:
- Create a WRITTEN agreement with the terms of the loan (when due, interest rates, what happens in case of default, etc.), and have all parties sign and keep copies.
- Come up with a WRITTEN plan for payback
- Make sure you can pay the loan back
This will be the cheapest 3000 loan with credit that you can get, but if you don’t write everything down and make sure all parties understand the terms you can end up making enemies out of good friends very quickly.
Option 3 – Payday loan (actually more than 1 payday loan)
This is BY FAR the least recommended option, and should only be used in extreme circumstances. This will be the most expensive option by far, and is not recommended for dollar amounts greater than $1,500 or 35% of your monthly income. However, there are no credit checks required, and as such you can have bad credit and qualify for the loan(s).
There are several problems with such loans, especially when it comes to higher amounts, such as a $3000 loan for people with bad credit:
- You will need to actually apply / take out more than 1 payday loan, as most companies will only offer a maximum of $1500 per loan. In addition, some companies will not offer you a loan if you already have another payday loan currently.
- Interest rates and fees are very high. On average, you can expect to pay $15 per $100 borrowed, so that comes to about $450 if you need to borrow $3000.
- You will have to pay the loan back by your next paycheck, so unless you have the capability to pay back $3,450 in the next few weeks you won’t be able to take out the loan.
Obviously, you can see that this is not a great option and should be avoided unless you are in a real emergency.
Option 4 – Title Loan
Title loans are very similar to payday loans, with one exception – you secure the loan with the title to your vehicle. If you don’t pay the loan back then you lose your car, and they won’t be bashful when it comes to collection times. The one advantage you have over a payday loan is that you can take out more than the $1,500 – the actual amount will depend on the amount of equity you have in your vehicle.
However, I don’t like these loans at all. The rates are just as high as payday loans, they are also very short-term like payday loans, but you can lose your car if anything goes wrong – making a bad financial situation even worse.
Options that are out of the question:
-Peer to Peer lending organizations (they typically require a score of 640 or above)
-Unsecured personal loan for 3000.