The last few years have been a difficult time for many of us and while we are, apparently, in an economic recovery, there are still people who don’t have great credit ratings. Getting personal loans with bad credit is not easy but it’s not impossible either. There are some lenders out there that focus on the sub-prime market and that will give out loans to people with less than stellar credit ratings.

If you are looking for personal loans with bad credit, then you will need to find a lender that is willing to consider your recent payment history, and to work with you to give you a loan that you can feasibly afford to repay. The affordability checks that the sub-prime lenders do are strict and look at more than just your past history. They may want to see some payslips or get a detailed breakdown of your budget. This is to make sure that you will be able to pay off the loan.

Try to avoid doorstep lenders or lenders that do very short term, high interest loans. An ideal option would be a bank that you have a relationship with, or to borrow from a credit union. Usually, to join a credit union you have to have a connection with the union either living in the area that it is based or being a part of the profession that it is aimed at (or, alternatively, being a child of someone who worked in that profession such as a union for shipbuilders or miners).

Credit unions offer affordable credit and ethical savings accounts for people even if they perhaps don’t meet the criteria for a traditional account.

Overdrafts and credit cards are good for short term loans. If you need a bigger, longer term loan then you should think carefully. There are some lenders that will offer secured loans, but these are not a good option. If you have a poor credit rating, this means that at some point you have been unable to service the credit that you already had. Failure to make payments on a secured loan mean that you risk losing whatever the loan is secured upon. Do not take this chance. If you can, just wait to take out a loan that is not secured. This may mean that you don’t borrow for a while until your credit is repaired, but there are only some very limited circumstances where risking your home or your vehicle would be a better option.

Personal loans are something that should only be used when the value of the thing you are borrowing for makes it worthwhile, this means things like a loan for an asset that you use for work, a vehicle to get to work, or home improvements that will actually save you money in the long term. Borrowing for a holiday or a birthday is only sensible if you can get very low interest on the loan.