Due to the recent recession it has made it harder for people to get lines of credit and loans. For those with bad credit it is even harder to get a loan or line of credit from a traditional lender such as a bank or credit union. Due to these circumstances, people have to search out alternative funding services. In many cases you may be able to borrow 5000 dollars or less from these alternative sources.
Borrowing from your Family
If you only need a small amount of money, you can always turn to your friends and family. They may be able to help you out and you will be able to avoid having to pay any interest rates. There are a few problems with borrowing money from friends and family; first, they may be suffering from the recession as well and not have the funds to help you out, and second, they most likely will not be in a position to let you borrow up to 5000 dollars.
Borrowing from your Employer
In some cases you may want to consider asking your employer for a loan. There are many companies that will offer loans and then take the payments out your paycheck. Many employers will offer their employers good terms and low rates, and will sometimes, if the company is large enough, will not charge any interest at all.
Getting a Bad Credit Loan
There are also non-banking lenders that can lend you money if you have bad credit. They give credit in short-term loans, that many know as payday loans or cash advances. These loans do not typically require a credit check and can loan amount up to $2,500. Some institutions can even loan out more. In order to obtain one of these loans you must have some sort of verifiable income and references that can also be contacted. These loans usually have a high interest rate and give you only a short time to repay, but in some cases it is the only option.
Other Bad Credit Loans
Secured Loans
If you have some sort of collateral that you can put up there are quite a few different types of loans that let you borrow $5000 or less that you can acquire. The smallest step is a pawn shop; they will allow get a loan on a variety of possessions from electronics to golf clubs. You usually place your item on loan for three months and you can make monthly payments, or come back at the end of the three months and pay the entire amount at once. Pawn shops do charge a hefty interest rate and it does not change even if you pay on the item monthly.
If you have larger items to use as collateral, such as a home or a car, you will find it much easier to borrow 5000 dollars or less. There are many banks and lenders out there that are more than willing to loan individuals with bad credit money as long as they have the collateral to back the loan up. The bank or lender will place a lien on your home or car, whichever you choose to use, and if for some reason you default on the loan they can take possession of it. However, if you pay off the loan completely, the lien will be lifted.