The recent recession-induced job losses had put a lot of people in bad credit. Tristan is one and she’s asking where to get a loan with bad credit now.
“I used to have a clean slate until two years ago when I lost my clerical job. I was unable to pay my loan for three months. But now that I’m back with a good job and having paid up my past debts, I’m finding it hard to take out another loan because of my bad credit. I’m wondering where to get a loan with bad credit. Is there a direct lender willing to give loans even to borrowers like me? – Tristan, OH
Admittedly it will take you some time to recover from a bad credit score and, ironically, you’ll need more loans to put your credit back in shape. But how to do that when lenders are shying away, right? You have some options, where getting a loan–like the kind of fast loans they lend in the UK or Canada–may be fast and easy even for people with bad credit. Just make sure to pay back on time to slowly build your credit again.
Use the home or car as equity
Use the home or car as equity to secure a loan. A direct lender will be more willing to give you loan approval if he has a security blanket. In case you default, he can recover the loan from the equity. Of course, the biggest drawback with this strategy is that you might lose the house or car. Only put your house or car on the firing range if you desperately need the loan and that you can pay it back on time.
Join credit unions
Another credit option where to get a loan with bad credit is to check your city or town for credit unions. In some areas they’re called cooperatives simply because the lending company is owned by the borrowers. Credit cooperatives have more lenient requirements than mainstream lenders like banks. They rely more on your initial cash outlay to become a member than your past credit record. Here’s how it works—each member owner will be asked to deposit cash like in a savings account. The savings entitles members to take out a loan subject to limits and frequency set by the union. If your deposit is small, your loan limit will be small, too. Credit unions are the closest thing to lending from a bank in your case. The interest is permissible and, better yet, your cash is earning dividends since you co-own the lending cooperative. The drawback is you need cash before you can take out a loan.
Apply for online loans
Many lenders are offering online loans for people with bad credit. As long as you have a steady income like your job and bank account, the approval process is often quick. Like credit cooperatives, online lenders are more interested if you have the money to pay the loan in the next few months, instead of reviewing your historical credit performance. You’ll be asked to fill up an online application form with your personal, work and bank data and the loan is transferred to your account. Does it sound too good? The drawback is the interest and penalties are stiff. Make sure to pay this type of loan on time to avoid being charged for more fees. Take this quick online test by the American Association of Retired Persons to see how well you stack up with this type of loan.
Ask family or friend
You can also try asking for a loan from family and friends, especially if the loan is small. These people will be more lenient and easy to deal with than a direct lender. The drawback is if you fail to pay back your relationship will suffer. Not the least, taking out a loan from someone you know may put you in a less than dignified situation.
Take care of your financial and mental health
Your debt problems may take a heavy toll on your mental and physical health. Do not take financial issues to heart. Implement these smart tips to ensure you overcome your debt concerns with the least anxiety.
CONCLUSION
These tips are some of the better alternatives where to get a loan with bad credit. Whichever you take make sure to pay back on time to gradually put your credit score back in shape.
Why is FinancesOnline free?
It is easy to say that the U.S. depends on a credit economy to max out your credit card and run a huge debt. In the end, you have to face the consequences of your imprudent lifestyle. Therefore, use your common sense and your debit card more to avoid falling into debt.
Recession and outsourcing are taking away thousands of jobs from industrialized nations. Therefore, it has become essential to maintain a good credit record just in case.
I wouldn’t recommend using your home as equity unless it’s a life and death scenario. That’s a real gamble and you might end up without a roof above your head. But for the car, well, maybe. You can always take the bus or train if worse turns to worst. I’m just curious how home equity is an option for online loans. These are worlds apart in amount, terms, risks and many other factors. Online loans are best used for short-term financial needs, whereas home equity is long-term.
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