If you are in need of a loan and have bad credit, getting approved by a traditional bank may be slim. If you’ve applied and are denied, it could take years to get your credit back on track for approval. Here are 6 tips on getting a loan with bad credit and some offer loans with bad credit or no credit check option.
Take Out a Loan against Your Property
If you own your own home or have investment property, take a look at the equity in your home. Home equity loans are not credit based. The equity in your home is yours and you have the right to it. These loans have a low interest rate as well. Check with your tax advisor about how this type of loan could be tax deductible.
Check with Your Credit Union
Credit unions are similar to a general public bank. The difference is, they are member specific. For example, you may be eligible to join a credit union because of where you live, work, or your specific occupation. Credit unions are considered member owned, and they work within themselves to help the members out and generally offer lower interest rates. You should be able to sit down with a loan officer and see if something can be worked out.
Sign Up With Peer-To-Peer Lending Sites
Peer-to-peer lending is usually done online. A person can go online and apply for a loan. You would simply explain what you need the loan for and how you plan on paying the loan back. Then, individuals can contribute to the loan pool until your funding is raised. There is an entire credit and background check performed. However, since this is a personal based lending platform, a person may opt to not consider your credit history. The interest rates offered on peer-to-peer lending sites tend to be much lower than traditional banking methods.
Apply For a Loan with a Co-Signer
Applying for a loan with a co-signer to some is the equivalent to asking someone for a direct loan. Many lenders will approve someone with bad credit if they have a willing co-signer. A co-signer is stating that if you default on the loan they will take full responsibility of the loan. You must be careful with using co-signers. Relationships have been destroyed when it comes to loans. Before signing with a co-signer on any type of loan, analyze the situation to ensure it is worth it and know exactly how you will be able to pay the debt off.
Apply For a Student Loan
If you are in school at a higher learning institution, you may be eligible for a student loan. It’s not advised to take student loans unless you really need them and their purposes are for school expenses and personal living assistance while you are in school. However, student loans do have low interest rates and many students with bad credit are approved for a loan. Usually the loan is dispersed to the school directly, and you will need to wait for the school to clear any outstanding expenses in your account. Your chances of being approved for a student loan are pretty high.
Borrow Against Your 401k
Track All Your Accounts With Personal Capital
Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.Another method of accessing a loan with bad credit is to borrow against your own 401k or IRA plan. This is your own money you are borrowing against. The administrator of the plan may have set guidelines in place, such as a specific amount that can be borrowed or the number of outstanding loans you can have out at once. The interest is low and paid back to yourself directly through your paycheck if it’s an employer sponsored plan.
Leave a Reply