It’s inevitable that at some point an individual will be subjected to financial problems, or be struggling to build their credit for the first time. At these moments in life it is difficult to get a loan. Also, with rules, it’s important that consumers understand what things will affect their credit and how they can build it back up. Many are surprised to find they have more options than they expected. There are many ways to get good loans with a poor credit score.
Many find that poor or no credit prevents them from getting a loan because they are seen as a high risk borrower that has a higher chance of not repaying or defaulting on the loan. Until one’s credit score is raised, they won’t fit the criteria set forth by lenders to be considered for loans by the big banks.
For anyone who has been turned down for a loan or who would like to avoid paying a subprime or high interest rate, here are some options that may work!
Home Equity Line of Credit
How does a low-interest and tax deductible loan sound? For those that have enough equity in their homes, this is entirely possible! This may be the best type of loans with poor credit score that anyone can get. The only downside to this is that tapping into the equity may put the home at risk if the loan isn’t repaid; but for those with a dependable income and who are very disciplined at paying down loans it’s not a problem. Credit score doesn’t even come into play.
If this is one of the considered choices, the borrower should compare several loans from different banks so they can be sure they are getting the lowest interest rate possible before signing anything.
Apply to Credit Unions
A credit union is much like a bank but the difference is that it is owned by the members. Members have a commonality such as all being in the military or a similar job, or farmers, or they live in the same locality. As nonprofit organizations, they are able to offer loans with poor credit to members and deep savings in the form of low fees. They also offer phenomenal customer service.
Peer to peer also known as P2P lending has been available since 2005. It’s actually an online method that allows a person in need to borrow right from an individual instead of a bank or other institution. This type of loan is growing in popularity because it’s an easier process that’s perfect for borrowers. They can pay lower interest rates on a loan for poor credit than they would from other methods, and investors take advantage of high interest rates. Currently, one can borrow for as low as 6%.
Borrow from a Family Member or Friend
Many end up borrowing from a friend or family member instead of other avenues. This transaction should be done just as it would at a financial institution to avoid conflict, which is the biggest downfall for this type of loan for poor credit. A written agreement should show terms, interest rate and any collateral involved. That way it’s clear what will happen if the loan is defaulted upon. There are many places online to get guides to write these up.
Get a Co-Signer
If at all possible, one can get a loan with a co-signer. What this means is that they will get a loan with poor credit and if they default the co-signer will pay. It has to be someone that trusts the borrower’s ability to repay the debt.
Be matched to premiere lenders for a personal or short-term loan with ease when you work with Willow Loans. Regaining control of finances even with bad credit is the goal of this growing company that provides a quick and easy method for application online.