Just because you have poor credit or no credit, it does not mean that you are out of options. It does cause you to have a harder time securing a personal loan yet you can do so with some work on your end. Today, this article is geared towards those who have been denied for a personal loan because of their credit rating or were quoted high interest rates.
Home Equity Line of Credit
Many homeowners owe more for their homes than they are worth. However, if you have equity in your property, you may qualify for a line of credit that you can use as you please. However, before taking this route make sure that you actually need the money. You would be putting your home at risk if you cannot repay. If you have a steady cash flow and you are someone who is good at managing money this is an alternative option to consider. Your credit score will not play a factor either.
Go to Credit Unions
Members own credit unions so it is easier to get a loan through them than a bank. They are considered a nonprofit, they work by passing earnings to their members at lower rates, and their customer service is better than banks. All you have to do is go to your local credit union and discuss obtaining a personal loan through them. We suggest comparing interest rates to ensure that you receive the best deal.
Lenders that Specialize in Bad Credit
There are some lenders out there that specialize in helping people with bad credit. Often times the loan amounts may be smaller but they can usually help people get a personal loan if you have poor credit. Just be prepared to show you have a way to pay back the loan and that will go a long way in helping with the approval process.
Go to Your Peers
Peer to Peer lending (P2P) has been around for a decade now and it is becoming a popular option for those who need personal loans but do not have the best credit. With this option, you will be borrowing from other individuals while getting a low interest rate.
You will have to post a loan listing and investors have to choose to back your listing. This could take some time to happen because you have to wait for an investor to show empathy for you. However, it is a cheaper option than a bank and the chances of having your loan funded with your credit rating are higher.
Check out sites such as Lending Club and Prosper to get started.
Ask Friends or Family to Co-sign
Many people do not like asking their family and friends for a loan directly. An alternative for this is to ask them to co-sign for you to get a loan. As a co-signer, they will need to have good credit and an established financial history. However, they can help you get a lower interest rate and approved for a personal loan that you would have not been able to obtain otherwise. When taking this route just keep in mind that you will want to pay back the money or you are putting your loved ones finances at risk.
While it may be difficult to obtain a loan with poor credit, it is 100% possible. Try the options that we have listed above to increase your chances of being approved for a personal loan despite your credit.