Bad credit is one of the most dreaded thoughts for anyone who is seeking a loan. This makes you a high risk loan applicant for credit unions, banks and other money lending institutions. Such lenders have stringent terms and conditions, requiring high credit score ratings before granting a loan. Thereby, if a lender is not certain about your financial stability, then your chances of getting a loan become bleak.
If your credit score is poor, here are 7 ways you can get a loan:
- Seek Help from a Credit Union
Credit unions operate in a similar manner as commercial banks in terms of their service. However, such unions are owned by membersnot stakeholders who are known for their profit seeking psyche. Such institutes are governed with a non-profit approach making them a viable option for personal loans for people with a bad credit rating.
So, if you are linked to a credit union that is community based or associated with your employer, then your chances of securing a loan increases. A credit union will take your morality and commitment into account and grant you a loan if you commit to repay.
- Secured Loans
If you have a poor credit score then you can apply for a secured loan. Such loans are granted against an asset you own. If you have stocks, car, jewellery, etc. you can opt for a secured loan in lieu of your prized possession.
Thus, if you become a defaulter the lender will keep your assets as collateral.
- Get Help From A Loved One
If you have a bad credit rating and require money, a friend or a loved one can prove to be worthy. However, if you are borrowing money from a loved one you need to be more peculiar about repayments as it can affect your relationship. Nobody wants bad personal terms along with a poor credit rating.
Many times, people who take loans from their loved ones get more benefits. For instance, with a bank you will have to make repayments as per the terms and conditions set. However, with a loved one you can get more flexibility and convenience.
If you take a loan from your family, make sure to document the terms and conditions in black and white to avoid financial damage for both parties.
- Opt For Peer-To Peer Loans
Peer to Peer lending is a new way to secure a loan. Here, an individual can secure a loan online from a person rather than a financial institute. A lender will go through your profile, evaluate your demand and grant a loan ifpossible. Your credit score will be taken into consideration, however there is greater flexibility and chances of approval are a lot higher.
To calculate the amount you are eligible for, make use of an online loan calculator. This way, you will not make an unjustified demand. If you’re looking for a loan calculator to use, 118 118 Money have this one which is extremely easy to use.
- Apply With A Co-Signer
In case your loved ones can’t give you a loan, you can seek help from someone with a sound credit history to become your co-signer. Such an individual should trust your ability to make repayments and then take the responsibility as a co-signer to cover you if necessary.
If you have a good co-signer, the loan institute will define the terms of the loan basedon the credit history of your co-signer. A co-signer will be responsible for making the repayment in case you can’t.
- Benefiting From Your Home Equity
If you have home equity, you can apply for a home equity loan. Primarily, home equity is the difference between your mortgage amount and the net worth of your home. Such, loans can be secured regardless of your credit loans where your house is used as collateral. In such cases, the interest rate is kept quite low as the loan is secured with your property. Moreover, the interestpaid on your home equity is also susceptible to taxes.
- Online Personal Loans
With the Internet becoming part and parcel of our everyday life, you can opt for a personal loan from online vendors. Such vendors also facilitate individuals with bad credit scores. They offer finances for credit card debit, car or home repairs, etc. The best part about such vendors is that they are extremely efficient and require no processing fee or stringent documentation. You can use the online loan calculator referenced above if you want to look into how much money you can loan.