How to Get a Loan if You Have Bad Credit
For many people, maneuvering through the credit game can be extremely stressful. Sometimes when you’re just starting out or have lost a job for a little while, you can find yourself in a situation where you start surviving on credit with very little income to pay down your debt. This can result in your credit score plummeting. We all know what happens when your score drops to very low levels. Once your credit score dips into the 500 range, it becomes very hard to find lenders willing to give you a loan for a house, a car, or to even start your own business. If you are able to find a loan, you usually end up with terms that can include additional insurance fees, carry a high interest rate, or additional administrative fees because you’re considered an at risk borrower. The good news is that there are some other solutions that you can use where you can get access to money and maybe even save some money on interest payments while you’re at it.
How to Get a Loan if You Have Bad Credit – Family and Friends
This can be the easiest way to get a loan. In some cases, your family and friends won’t even require paperwork to give you the money. Of course, this works best if you’re a person that they can trust and are responsible. If you have been irresponsible with money in the past, you may need to find another route to get money.
How to Get a Loan if You Have Bad Credit – Private Lending
Private lending, also known a hard money loans, is a growing industry that is really gaining popularity in real estate investing circles but you can access the same lenders for any type of loan as long as they agree to lend you the funds. There are more hoops to jump through to get approved for hard money including additional paperwork and sometimes an in person interview. But, if you have a good case and a solid payback plan, they will lend you the money.
How to Get a Loan if You Have Bad Credit – Peer-to-Peer
A relatively new industry has launched from the mainstream use of the internet which is peer to peer lending networks. All sorts of people from all over the world use peer to peer lending sites to fund a wedding, tuition, down payments on a house and more. You list your request on the site which includes why you need the loan, how much you need and then investors put money into your project. If enough people pool their money together, your loan is executed and you pay them back monthly just like any other loan payment plan.
How to Get a Loan if You Have Bad Credit – Collateralized Loans
There are loans that companies will make to you if you leave something of value with them in the event that you don’t pay the loan back. Once, the loan is repaid, you can retrieve your item during normal business hours. The interest rates on these loans are typically higher than you would find elsewhere but if you need access to cash, this can be a very viable option. Most pawn shops operate using this model as a choice when you pawn things that you own.
How to Get a Loan if You Have Bad Credit – Final Thoughts
As you can see from the possibilities listed above, there are more than a few solutions for people with bad credit to still get the money that they need. No matter where you live in the world, there are options. There are even ways to find loans for blacklisted people in South Africa by utilizing one of these avenues. Try them out for yourself; I’m sure that you will find one that works for your situation.
The Peer to Peer market seems to becoming very popular, not only for people looking to borrow money, but also people looking to invest and make money. The interest rates seem to be a bit high, but it is a service aimed at people that will have a hard time with a traditional bank loan.
Brock @CleverDude recently posted…Do Fund Raising Discount Cards Really Save You Money?
Yes – I’ve been toying with investing a small amount of money in it for more than a year, but have not brought myself to give it a try yet. I think it’s a pretty good alternative to the payday loan idea…
I’d probably go with peer-to-peer lending for a loan if I had bad credit. There is too much that can go wrong when it comes to borrowing from family and friends and I wouldn’t want to go down that road.
Jon @ Money Smart Guides recently posted…My Scottrade Review: One Of The Best Online Brokers
I agree Jon. Borrowing money from family almost never ends well.