What to Do if Your Credit Gets in the Way of a Loan?

Have you ever been denied a loan because of your credit? Rejection stings at the best of times, but it can complicate your life when you’re facing an unexpected emergency expense you can’t afford on your own.

If you’ve been denied a loan due to bad credit, you still have options. Here are some ways you can pivot your rejection into a positive thing.

Retool Your Budget

You may not think you have the cash you need on hand, but if you haven’t double-checked with your budget, you could be incorrect.

Before anything else, sit down with your budget to look at your spending. If you’re lucky, it’s early enough in the month that you can put all unnecessary spending on hold.

Look to subscriptions, cable, takeout, and paid memberships. Cancel these to free up some cash until you get back on your feet.

Try to Earn More Money

Your budget is a balancing scale of expenses and income. If you can’t lighten the load of your expenses, consider increasing what you earn. Having a secondary stream of income can come in handy, even when you aren’t facing an emergency.

If you aren’t sure how you can boost your income, check out how to make money from home to get the ideas flowing.

Talk to the People You Owe

Don’t suffer in silence. Businesses, doctors, and dental practices can’t help you if they don’t know you’re struggling, so let them know you can’t pay them right away.

When you make that phone call, ask if they offer payment plans. A payment plan breaks down your bill into smaller payments distributed over weeks or even months. You may also ask about a bill extension to delay your payments altogether.

Reasonable businesses and healthcare practitioners would rather you pay back what you owe slowly than not pay at all.

Research Second Chance Installment Loans

Just because one lender considers your bad credit a red flag doesn’t mean all lenders will share the same opinion. There are second chance installment loan lenders that cater specifically to people with bad credit.

Plenty of people denied funding apply for a second chance installment loan, but you don’t need to show proof of rejection to apply. These installment loans are available to anyone who believes their bad credit may stand in the way of other borrowing options.

While these may give you a second chance at funding in an emergency, don’t let the pressure to find fast funding go to your head. It’s still a big decision to borrow money, and you should take the time to compare your options. This way, you may find the best possible rates for your needs.

Bottom Line

If you’ve been rejected a loan, it’s time to try for Plan B. Whether that’s retooling your budget, earning more money, or borrowing a second chance installment loan is up to you.

Investigate each option thoroughly to see which one can be Plan B, C, D, or even E. Take as long as you need to research the list above. Eventually, you’ll find something that lets you tackle your emergency.

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Nirupama Verma

Nirupama Verma is a self passionate blogger, managing a bunch of informational blogs. She has written a lot of informational content for several popular blogs.