Types of Loans for People with Bad Credit
Having to Google “loans for bad credit” is enough proof that you’re in quite the pickle. However, the results are promising since there are plenty of solutions lying around the Internet.
In this light, having bad credit in the 21st century isn’t such a catastrophic problem anymore. If you haven’t got the time to do some research yourself, we’ve got you covered. In the following, we’ll introduce you to the most common types of loans for people with bad credit.
A Home Equity Line of Credit can come in handy when you can’t get some other type of funding. The best thing about this is that it comes with lower interest rates than many other loans, including the classic credit card. On the not-so-bright side, you’ll have to put your house down as collateral. Other disadvantages are: you can be penalised if you don’t use the HELOC right away and you will likely be asked to pay the closing costs.
P2P are platforms where operators match clients with lenders. You simply let them know what you’re looking for and they search for the best deal they can get you. This method, too, comes with lower interest rates as well as with fewer fees. P2P lending offers some pretty generous loans for people with bad credit. Needless to say, it’s a much better option than going down to the bank just to have the door slammed in your face.
A co-signed loan is hard to get because somebody risks their credit scores for you. This is how this works: let’s assume a friend of yours has a great credit score. You can persuade him into signing the paperwork for your loan. The tricky part is that, if you’ve shown a pattern of ruinous financial behaviour, no one will be too keen on helping you out; all the more so considering that if you don’t stick to the repayment plan, the co-signer’s credit score will plummet, and he’ll have to pay all your financial penalties.
A Loan with Collateral
Providing collateral makes a lender stress-free, which automatically ensures you a loan. Things are not so innocuous as they might seem, though: default on your loan or keep on missing payments and the lender has every right to seize your collateral. If the collateral is your house, you’re in more serious trouble than you were prior to taking that secured loan. If you do decide to go with this option, don’t take any wrong steps, lest you can end up homeless.
Online Loans for People with Bad Credit
There are online lenders who offer all sorts of loans to people whose credit scores are low. You just have to perform a Google search and choose the most fitting offer. There are myriad sources of loans for people with bad credit, so don’t make a hasty decision.
Discharged Part IX Debt Agreement Loan
If your financial situation is so complicated that you have to look for loans for people with bad credit, then this might be the right solution for you. The Part IX (9) agreement might help you get some money. Part IX is an alternative to bankruptcy and it is an agreement between the creditors and you.
Cash Loans With No Credit Check
The number of Australians applying for this type of loan has increased considerably in the last 10 years. Formally known as small amount loans, the credit has a limit of $2,000 or less and has a term of reimbursement of 16 days to one year. The loan is unsecured and can be taken out in no time, with no credit score check.
Is this one of the best loans for people with bad credit? Well, while it might sound really good, the interest rate is significantly higher than other personal loans. Moreover, if you don’t pay your bills on time, you can be charged double the amount you borrowed.
Secured Personal Loan Without Credit Check
This is one of the loans for people with bad credit that requires securing the credit with one of your goods (your car or your house). If, at some point in your loan, you cannot afford to repay, the lender can recover the money from reselling your assets. This type of credit is easy to access, as the lending institution doesn’t check the credit history.
Unsecured Personal Loan Without Credit Check
Easily described as the opposite of the secured loan, an unsecured personal loan can be defined as an agreement between you and an institution that accepts to lend you money without asking for guarantees. Usually, the interest rates for this type of loans are higher compared to other credit lines.
As a parting word, we recommend you ask for help on Bad Credit Loans if anything else fails. You will most definitely find a product that’s tailored to your personal financial needs.