Recovering your bad credit score can be a headache especially if the reasons behind it is related to you struggling financially or because you might be working to build your credit score for the first time. Most of the people are not aware of the options they have or places to look for where they can still get a loan from even if they have a bad credit score. Or some might even get stuck into options which would not be a good option for them in the long term and impact their credit score even more, therefore it is very important for everyone to be aware of their options for getting a loan when things are not going good for them.
Top options about how you can get loan with bad credit
For the information of our readers we have compiled a list of different favorable options that one can avail if they are unable to secure a loan with conventional method because of their bad credit score.
1: Use equity from your property
If you own property with good equity then you can use it as a means to get your loan, even with low interest rate. However you need to be assured regarding your ability to pay back the loan before putting up your property on line, because you can lose it if you are unable to payback your loan. But if you do have a stable income which can support you to payback this loan then is a quite a reliable option even if you have a bad credit score.
3: Credit Unions
These are nonprofit organizations that work like banks but are owned by the members themselves. The members of these unions have something in common like belonging to the same work industry or living in the same area etc. the best thing is their low fee along with good customer services.
Option 4: Peer to Peer Lending Platforms
Peer to peer lending is the latest and most dependable option in the market since it was introduced in 2005. P2P sites provide you with an online platform that connects you directly with the lender rather than an institution. By eliminating the mediating party and the need for physical locations and workers etc. it reduces the rate of interest for borrowers as low as 6% and also provides lenders with high interest rates in double digits, creating an ideal situation for both parties. This platform increases your chances of having your loan sanctioned because of empathetic lenders who are willing to fund your loan even with a bad credit score. Different P2P platforms include the following, we’ll explain one in detail for your convenience:
- Lending Club: This P2P platform offers loans up to $40,000 with substantial repayment terms and a duration of up to 5 years, check out details her myinstantofferloans.us. Conditional on your creditworthiness you can source loan with interest rates below 10% APR. Others are Prosper, Peerform & SoFi.
Option 5: Seek support from friends or family
You can seek help from some of your generous friends and family that can lend you with your desired loan amount, by getting into a proper written agreement with them that states all the terms and conditions like interest rate, payment terms, or any indemnity you put up for the loan.
Option 6: Request to a Co-signer
Another considerable option is to request a credit worthy friend or family to become your cosigner in order to get your loan sanctioned. Someone who trusts in your ability to repay the loan timely and is willing to take the chance for you. Make sure you keep your end of the bargain, considering that if you default or are unable to pay on time the creditor will demand the full amount from your cosigner.
- Options you should avoid
Payday Loans
Payday loans are extremely short-term like 30 day loans with interest rates as high as 400%, they are designed to be paid off up till your next pay date. Even if they are easy to get, they are not the ideal solution considering they can put you further behind if you are unable to pay them on time, plus the huge amount of interest is totally unreasonable.
