Do you find yourself in desperate need of cash? If so, then you have probably tried applying for a personal loan. But with a poor credit history, you have very little chance of getting approved. This doesn’t mean you have to wait several months just to boost your score and apply again. If you know where to look, you can certainly secure a loan with a sufficient amount and relatively low interest rate. In this article, you will find out the different options for loans with bad credit.
Your first order of business is to scrap payday loans off your list. These loans are notorious for trapping customers in a vicious debt cycle. They come with very high interest rates, with the minimum usually at 20%. But shorter term loans command even higher interest rates. By the end of your loan term, don’t be surprised if you paid more for the interest and other fees than the loan amount itself.
Now that payday loans are out of the picture, it’s time to consider lenders that do not only consider credit scores. There are actually quite a number of lending institutions that can provide bad credit loans. While they still come with higher interest rates than other traditional loan types, they’re usually a much better choice compared to payday loans. Your credit rating isn’t the only factor used by the lenders when deciding to lend you money or not. They also take a look at your regular income to see whether you’re capable of making payments on time.
You should also look into peer to peer lending. There are plenty of P2P lending companies online. Instead of borrowing from a traditional lending institution, you will be connected directly with an individual. While relatively new, this kind of lending has become increasingly popular over the years as it presents a great opportunity for both investors and borrowers.
Another option is to look for a person who can co-sign a loan with you. This person must have a good credit history. He or she takes responsibility in case you fail to make your loan payments. The co-signer carries some risk, so be sure to meet your deadlines to prevent damaging your relationship with the person.
These are just some of the options you have when thinking about applying for loans with bad credit. Remember that your goal should still be to boost your credit rating so you can open up more opportunities in the future.