3 Lending Options to Consider When You Have Bad Credit
If you have bad credit, you may feel as if you have no chance to get the loan that you want. However, there are lending options available to you regardless of your credit score and history. While you may pay a slightly higher interest rate, you can get the money that you need to pay bills or take that vacation you have been putting off.
Turn Your Car Into Cash
Title loans allow you to use the equity in your car as collateral for a secured loan. The lending company will typically loan up to 80 percent of the car’s value, and you will repay the loan in 30 days. However, you may be granted more time to pay depending on the lender and the terms that you may be able to negotiate for yourself. If the loan is not repaid, the car is taken and liquidated to pay off the remaining balance. During the repayment term, you get to keep and use your vehicle as you see fit.
Home Equity Loans May Also Provide Inexpensive Funds
If you own your own home and have sufficient equity, you could also decide to apply for a home equity loan. Like a title loan, the home equity loan or line of credit is secured by the asset. Should you fail to repay the outstanding balance, your home is foreclosed upon and sold. One of the largest benefits to this type of loan is that those with poor credit can take advantage of interest rates that are similar to a mortgage. This means that you may pay an interest rate of 5 percent or less depending on your lender.
Payday Lenders Will Loan to Anyone
Payday lenders will allow you to borrow up to $1,500 to pay off credit card bills, make a student loan payment or pay your mortgage. The money is generally repaid in 15 days or less, and you lose nothing if you fail to repay. However, the interest rates may be higher than a secured loan, and you could be subject to additional interest and penalties if you need more time to pay the money back. State law may also limit how much you can borrow at any given time. On the plus side, you can apply for a loan online and have the money deposited into your bank account in a matter of minutes.
If you have bad credit, you may need to secure the loan with collateral or accept money form lenders that don’t require a credit check. While this may seem like a challenge, you can find quality loans from reputable lenders if you spend time shopping around before asking for money.