Poor credit worthiness is a major hindrance to getting a loan as the lender views you as a risk customer who may default or fail to repay the loan. Traditional guidelines followed by almost all the banks will not lend you money until your credit rating is attractive. But worry no more if you need a loan with a reasonable credit, because here are three alternatives with loans for bad credit.
They operate like banks but they are owned by their members who have something they share in common, like working in the same field or industry. They are non-profit organizations that pass earnings to members by offering high customer service and lower fees. You can check for some credit unions and discuss with them on getting a personal loan. Ensure that you compare from several unions to get the lowest possible interest loan.
Use the Peer To Peer Loan
Peer to peer is an online platform that has existed since 2005. It allows you to borrow from individual instead of financial institutions. Its win-win process having borrowers paying low interest for as little as 6.5% and investor earning high interest of up to 10.5% which is pretty impressive has made it grow in popularity.
Borrower post a request for loan listing the amount they need and why they want it. Investors review the loans requests and choose the one that meets their returns expectations. This lenders check credit worthiness, however you may find an individual investor who may be more empathetic to your situation.
Take a Loan from Close Friends or Family
If credit unions and peer to peer loan won’t lend you, perhaps you will have a friend or a family member who will. Treat this loan as a serious business transaction that has clear documentation and legit. Make sure you have a written agreement with the lender that covers the terms of payment, any interest rate, any collateral for the loan and consequences in case of default. Family loan should be of mutual benefit and should be the last resort as you don’t want to risk ruining your close relationship over misunderstanding about money.
Am sure one of the above options of loans for bad credit will work for you, but if it doesn’t just do your best to raise your credit rating so that you can qualify for a loan.