About 108 million consumers in the U.S. have bad or no credit.
If you’re among these people, you’ve probably experienced the negative consequences of having bad credit. Perhaps your loan applications at a bank or credit union have been rejected.
Does this mean you cannot access credit until you rebuild your credit? Well, there is good news. There are a couple of bad credit financing options that might interest you.
Read on to find out.
Personal Loans for Bad Credit
Banks, credit unions, and other traditional financial institutions might have a tougher stance on lending to consumers with bad credit, but that doesn’t mean everyone does. There are thousands of lenders, mostly in the informal lending market, offering bad credit loans. You can qualify for these loans.
You see, just because you have bad credit doesn’t necessarily mean you can’t service a loan. Sure, defaulting on a previous loan is probably why you have bad credit right now, but your financial situation might have improved since.
Lenders of bad credit loans have no interest in your credit score. They just want to see that you have a consistent income and are able to repay the amount you’re seeking. So, in many cases, you just need to present your paystubs or bank statements.
Secured Loans for Bad Credit/Title Installment Loans
A secured loan is a loan that has a collateral requirement. If you own a house or a vehicle, for example, you can use it as security to get a personal loan.
Secured loans for bad credit enable you to access higher amounts than you would with a bad credit personal loan.
If you need to borrow $100,000, for instance, it would be difficult to get an unsecured personal loan, since the typical maximum amount is $50,000. However, if you own a high-value asset, such as a home worth $350,000, it’s possible to use it as collateral and get loaned the $100K you need.
You can also use your title assets such as your vehicle to get small, secured loans. That’s because title installment loans usually carry a lower interest rate than unsecured personal loans for bad credit. Click here to learn more about these loans.
Some lenders allow consumers with bad credit to bring in a third party with good credit to co-sign their loan application. The co-signer agrees to assume responsibility for repaying the loan should the applicant default.
Your chances of getting a co-signer loan will depend on your ability to find a co-signer with good credit. Most people shy away from co-signing loans since they don’t want to incur the risk involved. But if you have someone who trusts you, a co-signer loan is an ideal bad credit financial alternative.
Know Your Bad Credit Financing Options
Having bad credit isn’t an ideal situation. By all means, try to rebuild it. However, going from bad to good credit doesn’t happen overnight, and in between, you might need to get a loan.
Fortunately, there are a couple of reliable bad credit financing options. You just need to choose the right option for your situation and find a reputable lender.
All the best in your personal finances and keep tabs on our blog for more helpful advice.