You may be struggling financially to pay your bills or just hoping to build your credit, but the fact remains that banks will see you as a high risk customer. No lending institution wants to give money to a person that they see as a risk because they don’t want to lose money on the deal. Of course, it’s very likely that it’s not your intention to take the money and run, but it’s a cold hard fact that banks won’t want to deal with you.
What happens if you need money? There are loans with bad credit options available to you, but you must be willing to look outside of regular lending institutions. Instead of heading on over to your bank, try the following alternatives:
1. Try using a home equity line of credit if your property has enough equity you can tap into. This type of credit is not only tax deductible, but you can spend it on anything you like. The one downside to using this form of credit is you could jeopardize your property if you can’t pay back the loan. When opting to use this as an option, make sure you have steady income and discipline enough to pay back your debt.
2. Loans with bad credit can be made possible by choosing to ask for a loan from a credit union. Though it’s easy to mistake a credit union for a bank, they’re actually owned by local consumers on a share basis. Many have found that getting a loan from a credit union is much easier than a bank.
3. Since 2005, many people have been able to get loans from peer to peer lending services. This online platform screens all applicants and creates a profile that investors can look at. If you fit the criteria of an investor, he or she will provide you the loan for reasonable interest rates. With that being said, your credit score is displayed and meanwhile, it may not deter investors, it still does play a role.
4. If you have a friend or family member with good credit, ask them to become a co-signer on your loan application. You have a much better chance of approval this way, but make sure you don’t get someone into trouble financially later on.
5. The easiest option may be to simply ask a friend or family member for a loan, especially if you’re looking to borrow a fairly small amount. In order to avoid complications in your relationship later on, keep it strictly professional and write up a contract on how you expect to pay back the sum.
Getting a loan with poor credit won’t be easy as you can’t use traditional methods. Since banks see you as a walking red flag, you will need to figure out other ways of getting a loan. The five alternatives mentioned above are just a few of the ways that you can get the money you need.