Getting a loan when you have bad credit is not the easiest task because you are viewed as a risk to the lender. They do not want to extend credit to someone that might default in the future. Luckily, there are ways around standard loans that require high credit scores. While you work to build your credit back up, try these simple tips to get the money you need now.
Peer to Peer Lending
One of the easiest ways to get around a bank’s strict requirements is with peer to peer lending. There are many institutions that offer this type of lending which is not provided by a lender, but a “peer.” The money comes from someone that is not related to you, but has an interest in providing you with funds in exchange for certain terms. Typically, peer to peer loans have lower credit score requirements and are more lenient in the amounts they will offer, not to mention the lower interest rates than would be provided by any remaining subprime lenders.
No Credit Check Loans
If your credit score is below 600 or you cannot find a peer to peer lender willing to lend to you, no credit check loans could be a viable option. These loans, as the name suggests, do not require your credit to be pulled. This means there is less of a risk of you being turned down. In exchange for this level of risk, however, you will have to pay a higher APR. The basic details required for this loan type include your name, address, length of residency, and your income (source and length of time). From the information you provide, you will be given a loan amount and repayment terms that you can accept (or deny).
Get a Co-Signer
If you have less than optimal credit, a co-signer can help boost your likelihood of obtaining a loan. The co-signer should be someone with a good credit history and stable income in order to boost your ability to get a loan approval. It is important to make sure that you understand the terms of the loan and can repay them, however, as the co-signer’s credit is on the line. If you default on the loan, the co-signer is still responsible, which means his credit score will suffer if you default.
Get a Payday Loan
If you are in a bind and need money now but have bad credit, a payday loan can help you out. These loans are easy to qualify for and do not require a credit check. The lender is more concerned about your job; in particular, they want to know about your employment stability and your amount of income. The funds are provided to you ahead of your payday, but you are usually required to provide your checking account information or a post-dated check to cover the advance to be paid off on your next payday.
Having bad credit does not mean you will not be able to get any type of loan – you will just have to be creative in the methods you use in order to get the money you need!