Easy Approval Loan Options Even With Poor Credit
Managing your finances in these dynamic financial times can be a tricky business. Sometimes, people who need a loan the most are often the ones who are denied such facilities. Having a poor credit score can make it extremely difficult for anyone to secure any kind of conventional loans.
If you’ve been repeatedly denied loans or mortgages chances are it’s because you have a poor credit score. Understandably, you might need immediate capital to alleviate your situation which might be hard to come by. There is no reason to lose hope for there are multiple alternate loans and lending services available today which provide a line of credit irrespective of credit score. Mentioned below are some sources of credit that are available today regardless of credit ratings.
Home Equity Credit Line
If you own a home or property and possess equity on it, then it might be possible for you to get a home equity line of credit or HELOC. Of course, there are major risks as you are putting up your own home as collateral. HELOCs are the best line of credit for people with low credit scores. To successfully qualify for a HELOC you need to have a loan to value ratio of 80%. This implies that there needs to be a 20% equity stake in your home. Homes with major pending mortgages may have had their values increased post the Great Recession. Some of the major advantages of HELOCs are the flexibility it offers in fund usage and low rates of interest.
Credit Union Loans
Compared to banks, credit unions have more relaxed standards for lending and often provide significant loans irrespective of credit ratings. Credit unions function like a closed organization where you need to be accepted as a member first before you can utilize and lending services. Almost all credit unions accept just about anyone for their services. They are non-profit organizations and hence offer loans at much-reduced interest rates than typical banks. They provide unsecured loans and reduced penalties in case of defaults.
Peer to Peer Lending
Peer to peer lending has come about with the rise of the economy of the internet. They are a fairly new kind of lending service and connect interested borrowers with individual lenders online. There are several websites that create a platform for these two parties to match and communicate. Some of the major benefits of P2P lending are extremely low rates of interest, lesser fees, relaxed standards on credit scores and an opportunity to explain to investors your reasons for the financial crisis.
Your friends and family members can help you out during times of financial difficulties by sharing your loan responsibilities. You can take additional partners who can share the responsibility of paying back a loan. Such members are taken on as co-signers. Since your loan partner will ideally have a stronger credit score, it will be easier for you to secure a loan. However, you must explain your financial situation and your capacity to payback honestly and clearly.
Payday advances are sometimes the only option one has during a low credit situation. It is incredibly easy to qualify for a payday advance, however, this can often result in an endless cycle of lending and debts if you do not have a proper financial plan. You should note that these loans have high rates of interest which often makes it the least favorable choice. Additionally, there are strong limitations on how much you can borrow. It is strongly advised to consider lending from other sources such as friends and family before considering a payday advance.
Pawn loans can be a great option for someone looking to put some fast cash in their pocket. As long as you have access to a pawn store are able to bring in an item of value and leave with cash, either a loan or just sell it outright.
Here's why a pawn loan can be such a good option:
- You credit score is irrelevant. The lender is loaning you money based on the value of the item you brought to the store, not your credit history.
- The transaction is fast. Usually 15-20 minutes if there is no line ahead of you.
- There is little repercussion if you do not make your payments. The only thing that can happen to you is that you forfeit the item you used as collateral. Now depending on how emotionally attached to that item you were will decide how big a deal this is.
- Not the most expensive credit. While pawn loans are not cheap they can be much cheaper than payday loans or other types of short term credit. Check with your local pawn lender to find out about their interest rates.
Call Uncle Richard
When all else fails you can call one of your relative or friends and hopefully come to some sort of an agreement. Remember to sweeten the deal with a little interest money and a payback plan. If you just hope they give you the money you may be in for a rude awakening. If you actually have a plan in place and they can make a little money on the deal then your probability of getting a "yes" answer go way up.
The key to making a good financial decision it to know all your options. Do some research as to which options might be best for you before you make any final plans.