Having credit damage can make it incredibly difficult to secure a loan when you need additional funding. However, if you have bad credit there are still several options that you can explore to get the funding your situation requires. We’re going to discuss the various loan options for those with bad credit, and how each can be used to gain more control over your financial life.
Secured Personal Loans
Secured personal loans are great options for those with bad credit because they require some type of asset to secure the loan. This collateral can be anything from a car or truck, to a boat, artwork, or any other valuable asset. This collateral security gives lenders a higher confidence that the loan will be repaid per the loan agreement. This can also lead to better rates and terms upon approval. Just remember that if you default on the loan, you forfeit the collateral to the lender.
Credit unions are similar to banks, but they are owned by their members, and they are usually able to provide more favorable rates and terms to their members than traditional banks. They are not-for-profit organizations, so they are able to lower interest rates and be more flexible with lending terms and the criteria used for approval. Joining a credit union can be a very effective way to find a loan when you have bad credit, though some will have certain criteria you’ll need to join. Research local options to see if there’s one that fits your needs.
Peer-to-peer lending, or simply “p2p” lending, is where borrowers and lenders are connected on a common platform. This bypasses conventional lending institutions but can result in far more competitive interest rates as well as better chances of approval for those with bad credit. One important note about these platforms, however, is to read their terms and conditions closely since they can vary drastically from one platform to another.
One of the strategies used by many people with bad credit is to work with a co-signer. This can be a family member or even a good friend that has good credit and is willing to co-sign for your loan. Since a co-signer is agreeing to repay the loan if you default on your payments, having one may help you get approval or better terms.
Home Equity Loans and Lines of Credit
For homeowners who have some level of equity in their home, a home equity loan or home equity line of credit (HELOC) can be an option. These are funding sources that use the home as the collateral for the loan, which can mean better rates and terms if you have bad credit. However, defaulting risks losing your home.
Payday Alternative Loans (PALs)
These are small, short-term loans that are offered by some credit unions to help members avoid payday lending options. These loans will have lower interest rates and fees than payday loans, which makes them more affordable borrowing options, overall.
Partner With Cash Link USA For Affordable Lending Options
Life happens, and when you have bad credit but need loan funding, understanding your options can make the situation much less stressful. Cash Link USA understands the various challenges that individuals face and has several lending options to meet a wide range of borrowing needs. Don’t let bad credit hold you back, reach out to Cash Link USA today to get started.