What types of loans can you get with no credit?
Unfortunately, people who have the worst credit are the ones who have the most difficult times finding loan options when they need money. Whether you have a home remodel that needs to be done or an emergency has happened, finding a way to get a loan can be a hassle when your credit is less-than-perfect. Thankfully, there are still some options available if you just take the time to look. People with no credit or bad credit have more loan options available to them then they might think. Below are some of the top ways to get a loan if you are in need of some money.
Types of Loans You Can Get with No Credit:
Home Equity Line Of Credit
If you own your own home and have for a while now, you should have some equity built up in it. If you are in need of some money, this is a great option for you. You can ask your mortgage company for a home equity line of credit. Keep in mind, however, that doing this isn't without any risks since you will be putting your home up as collateral to secure the loan. Don't use more of the line of credit than you actually need. Even with the risk, a home equity line of credit is a great loan option if you have a poor credit score.
Bad Credit Loans
If you don't mind paying higher interest rates on a loan, then you can have the option of applying for a bad credit loan. It is easy to get approved for these loans with little to no credit history. While these types of loans can be very tempting because of the ease of getting approved, they should only be used as a last resort. Many people find themselves getting trapped in endless cycles of debt with bad credit loans. They have very high interest rates and should only be considered when you are desperate for a small loan amount.
Credit Union Loans
Compared to loans you can get with your bank, loans from credit unions are generally much easier to get approved for. Their credit standards are more relaxed than traditional banks. For some credit unions, you must be employed with certain companies. Other credit unions will let anyone join and sometimes membership eligibility can simply boil down to residing in a certain area or being employed in a certain profession. Credit unions are non-profit entities. They are able to offer loans and additional financial services more easily than other banks and lenders that are profit-driven. It is well known that customer service at credit unions is typically better than at banks. According to www.gobankingrates.com, another benefit regarding a credit union loan compared to bank loans is that there are usually less fees and penalties assessed.
This is a new loan concept that many people have never heard about. While it may be a new way to get a loan, it's still a very reliable way to get a loan. There are many peer-to-peer lending sites online to apply through. Sites such as Lending Club, Prosper and Peerform are just a few of the options to look into. Through these websites, borrowers are able to apply for and receive loans from an individual lender instead of with banks and other lending companies. Even though these types of sites are popular ways to borrow money if you have bad credit, there are still some requirements to get approved. The credit you do have, your current employment and other factors will be taken into consideration when applying for a peer-to-peer loan. Additionally, these types of loans are considered unsecured and require no collateral.
If you have less than perfect credit and own a car, then you might be able to apply for a title loan online. The amount of money you can borrow using your car's title as collateral will depend on how much value your car is worth. The title loan requirements are not very strict as long as you can provide the lender with the title. They will put a lien on the car until you have paid the loan back in full. Title loans are a great option when you have bad credit because most lenders won't require a credit check in order to get approved. Many people shy away from title loans because they are afraid to get their car repossessed. There are many title loan laws in effect to protect borrowers from title loan lenders who try to take advantage of borrowers who are in need of money. Applying for a title loan online is quick and easy. You will only need a little information about the vehicle and the borrower to get started. According to www.wikihow.com, title loan interest rates can vary dramatically from lender to lender. It pays to do your research when choosing a title loan lender.
If you have a friend or family member that trusts you with money, you may be able to get them to cosign a loan with you. If they have good credit, you will be able to get a good interest rate on a loan. It can be a little difficult to find someone willing to risk their credit by cosigning with you when you have bad credit. You will have to work hard to convince them that you will be trustworthy despite your less-than-perfect credit history. Also, if you do happen to fail paying back your loan, then your friend or family member will be stuck with the responsibility of paying back the loan. If they fail to pay the loan back as well, you will both see your credit scores negatively affected. Don't risk ruining your relationship with friends and family over a cosigned loan unless you are sure you can successfully pay it off.
There are many different types of secured loan options available. A secured loan is one you apply for using an asset as collateral. For borrowers with less-than-perfect credit and assets, secured loans are a great choice and you can usually get a more affordable interest rate and term than with other unsecured loan options. A secured loan will typically come with a longer repayment term compared to other options such as bad credit loans and title loans. However, a longer repayment term can be dangerous and you will run the risk of getting stuck in debt. It is always best to repay loans as soon as you are financially able to.
Loans From Friends And Family
If you have trouble finding and getting approved for other bad credit loans, you may want to ask a friend or family member for a loan. Many people shy away from lending to friends and family because if the loan is not repaid, there could be a loss of a relationship. If you take a loan from a family member or friend, it is always best to be sure you are both on the same page as to how much the loan will be and when you can expect to pay it back. It is also recommended to put everything in writing and draft up a loan agreement together. This agreement should include all of the terms of the loan. This should include the total amount, interest charged, duration of loan and the number of total payments. Doing this before receiving money from a friend or family member can help prevent any hurt feelings or legal action.