The Best Loan Options To Start A Small Project, Even If You Have A Bad Score

Best Loan Options

How does a bad credit score affect your finances? Well, if you have poor credit, you may not be able to get a loan because lenders typically view applicants with a low credit score as uncreditworthy.

Even if you get approved for a loan with bad credit, the interest rate is likely much higher than it would be for someone with good credit. Nonetheless, all is not lost; you can still get a bad credit loan to finance a small project. 

Keep reading to discover the loan options available to start a small project, even if you have a bad score.

Secured Personal Loans

A secured personal loan is a type of financing acquired against an asset, such as a home, car, fixed deposit, or savings account. If you default on such a loan, your lender can seize the asset to recoup its losses. 

Secured loans tend to have lower interest rates than unsecured ones, which can be a good option for business loans. If you don’t have any assets to use as collateral, or if you’re not comfortable with the idea of putting anything at risk, then a secured loan may not be the right choice for you.

Unsecured Personal Loan

Banks usually require some form of collateral against loans, but sometimes you can get financing even if you have nothing to offer as security.  

If you have bad credit, you may find it difficult to get an unsecured personal loan. However, some online lenders are willing to grant these loans with high interest and a short repayment period.

Your lender may offer you a short-term unsecured loan if your score tumbles due to delayed bills or credit card payments, but this usually depends on your relationship with the lender. They may be more likely to grant your request if you have a history of good credit with them and if you persuasively present your proposal. However, they may require that you improve your credit score for future applications.

Cash Advance or Overdraft

A cash advance is a loan that allows you to withdraw money using your credit card. There’s a limit on the amount you can withdraw with most credit cards. The interest rates for cash advances are usually higher than those for making purchases with your credit card. But it can be a good option to finance your small project if you have a bad credit score.

Installment Loan

An installment loan is a credit facility where you repay the loan in equal or unequal amounts depending on the terms of the loan agreement. It’s a popular type of loan because it allows the borrower to repay the loan over time, making it more affordable for individuals with good credit.

If you have bad credit, you may still be able to apply with CreditNinja and qualify for an installment loan, but the interest rate may be higher and the repayment period shorter.  

Payday Loan

You can consider a payday loan if you’re employed and would like to finance a side hustle but have bad credit. This type of short-term credit facility will only last until your next paycheck.

Some online lenders offer payday loans via apps with less stringent conditions. With the convenience of these loans, the interest rates can be quite high.

How To Improve Your Bad Score

Even if your lender approves you for a loan with bad credit, you can take the following steps to improve your credit score.

  • Start by paying your bills on time to improve your payment history.
  • Try to keep your credit card balances low, which can help improve your credit utilization ratio. The basic rule of thumb is to maintain the ratio below 30%.
  • Get positive information added to your credit reports, such as good remarks from lenders, friends, and family. 
  • If you have any current accounts that are open but no longer in use, close them to avoid any fees that may be charged. It can impact your credit score if any fees remain unpaid. 
  • Get a copy of your credit report from the three major credit bureaus, Experian, Equifax, and TransUnion, once a year. You can also get a credit report by visiting the website. It will give you an idea of where you stand and what you need to do to improve your credit score.

These steps will help you fix your credit score over time.


You can still get a loan to finance your small project, even with a poor credit score. The interest rate charged may be high and the repayment period shorter. But, you can still take the steps above to increase your chances of getting a loan to finance your projects in the future.

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BSV Staff

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