Doesn’t it sometimes feel like your bad credit follows you around like a scarlet letter, calling you out to creditors and financial institutions? Ever get clammy hands while waiting at the service desk or bank to see if you get approved for a loan, just knowing in the back of your mind that it’s likely going to be a no? You think to yourself, I knew it, after you get declined, but deep down, you still had hope. Is bad credit a major hindrance? Yes, it is. Is it a life sentence? Of course not, and you can change it. Believe it or not, you still have options.
Sometimes you don’t choose bad credit; it chooses you. Life happens. Just because your credit is bad, it does not make you a bad person. Life is full of surprises–both good and bad. When adversities happen, like the circumstances that led you to poor credit in the first place, they can be overwhelming, but they do not have to defeat you. Have no fear, my friends; there are solutions out there for you. Even with a bad credit score, you can still have access to quick and easy loan options. Read on to learn more.
Think About How You Ended Up With Poor Credit
All of your credit activities are recorded, and your payment behaviors are reflected in your credit score reports. Since that’s the case, it’s essential to think about how you ended up with poor credit before taking out another loan. Your bad credit could be due to something you didn’t see coming, such as a massive hospital bill or an emergency that caught you completely off guard. Or it could just be due to poor financial management, which frequently leads to late payments or defaulted loans. If your woes were caused by the latter, then you should seriously consider whether getting into more debt to solve your credit issues is worth the risk. However, some situations call for urgent measures that only a loan can address. The question is, where, how, and from whom can you get a loan from with your unfortunate credit situation going on?
Your Family and Friends
As crazy as it may sound, the saying, “Family Comes First,” actually may apply in this type of scenario. You have sacrificed for your family, and they have sacrificed for you. Your family members are the people who’ll always be there for you, even thru times of financial crisis. Sometimes, you have to just set your pride to the side and simply ask. Unfortunately, not every family structure works this way, but the average family often does. An honest explanation of why you need to borrow cash should suffice. This method also eliminates the need for a background check. Your bad credit score won’t pose an issue because your family will often trust you and want to help you, except in cases of a track record of not paying others back. The best part about taking loans from family members is the silver lining of low or no interest. The same goes for friends – at least the ones you’re close with – because it might get awkward if you try to borrow from someone you’re not quite there with yet. Many of your close friends may agree to lend you money out of trust, with or without interest. With being that said, family and friend loans are definitely an affordable option; however, defaulting from this type of loan may destroy something much more significant than your credit score – your relationships. So, choose wisely.
Find A Co-Signer
In some instances where borrowing from a family member or close friend is not possible, you may be able to acquire a loan by bringing on a co-signer. The important thing about this option is finding a person with excellent credit to receive the best rates for the loan. Just keep in mind that this co-signer will be equally responsible for the loan you will be getting. Any default on the payment is your responsibility; however, your co-signer will have to suffer as well.
Online Loan Applications
New technology is being developed every single minute. Part of these industry-changing innovations is the creation of a new application process that allows private lenders to loan cash with minimal requirements and almost no care for your credit scores. They are open to looking at other areas, whereas banks won’t be. You simply have to submit specific requirements like your personal and identification details and other pertinent information, then poof – your loan is approved. Of course, as with anything, there is no guarantee. Applications get declined all the time whether the lending is private or not. However, these types of loans are often limited to a low allowable amount, which increases over time, depending on punctuality and consistency in paying the loan. The interest rates are not as low, and the payment options are not as flexible as the loans you may get from family and friends, but this is one speedy resource! You’ll be able to get your loan in just a couple of working days or as soon as it’s approved.
This option is considered more of a privilege that comes with being a member of a credit union. Nonetheless, it is an excellent option, especially if you have poor credit. Credit unions are informal lending organizations, similar to banks, that may exercise a bit more flexibility regarding the poor credit decisions you’ve made in the past. Not only that, but the ability to acquire loans from credit unions as a member allows the added benefit of extremely low-interest rates. However, understand that the money to be lent to you will come from the pooled savings fund of the other members of the organization. In other words, you cannot ask for an extension of the terms of payment as a courtesy to the other members who might also want to secure a loan.
Peer-to-Peer (P2P) Lenders
This is another flexible option if bad credit haunts you. Though the interest rates are much higher compared to the two previous sources, you still may want to consider it. Peer-to-Peer (P2P) loans provide a platform where you can find a market of people willing to lend money through online transactions. The process won’t be as fast as you think, but it’s definitely an option if your back is against the wall. One positive feature is that collateral is not needed to obtain a loan, and some lenders can be very flexible with the terms. You just have to find your right match through the intervention of a reputable peer-to-peer lending company.
These types of loans are not the most ideal, but they are still an option to take into consideration that has a fast-turnaround and absolutely no care for your poor credit history. They have often been referred to as predatory loans because of the high-interest rates. They also require direct access to your bank account to ensure payment of the loan. As long as you maintain accountability for paying the funds back immediately, you won’t get caught into that trap that many others have found it challenging to liberate themselves from.
Another answer to your poor credit problems is secured loans, where you can leverage an asset that you own as collateral such as personal property, including a house or a car or even stocks and bonds. These securities serve as a guaranty for the lender, making it possible for you to secure a substantial loan with low-interest rates. However, this is a high risk for you compared to unsecured loans because defaulting on the payment means you could lose the asset that you set up as collateral in acquiring the loan. But if you need the funds, this is one of many methods you could try.
Don’t Settle for A Life With Poor Credit
Loan options when you have poor credit will never be as attractive as the loans you could acquire with good credit, but it’s nice to know that there are still other loan options to run to amidst adverse situations. You shouldn’t settle for a life with poor credit. Let these options give you a chance to build up your credit once again. Bad credit loans should not be your new status quo; they should be a stepping stone for you to revive back to life your credit score. Always remember that the strict rules associated with loans are not made to punish or limit you, but to protect you and all other stakeholders involved. Hopefully, some of these tips will assist you in your journey to acquiring a new loan and getting out of your recent debt.