If you have bad credit, it can feel like you’ll never be approved for a loan. This isn’t the case anymore. There are a lot of different financing options from a variety of different private lenders.
When your credit is low and you can’t get approved for bank loans and other traditional forms of credit, the five loans below will help you get money you need and, in some cases, increase your credit score. You just may be surprised about what it is available to you.
1. Student Loans
Are you in school? Even if you don’t need money for tuition, you can get some cash from student loans. Federal student loans don’t require a credit check. This provides a method for getting some money to get through school without a high credit score or any credit history at all.
Still, remember to pay back the loans as soon as possible. Student lending can be a pain for a lot of people when they put off making payments. With three types of student loans – federally subsidized, unsubsidized, and private options–there are a few ways to get . They have the same interest rates for every borrower, whether you have a high credit score or not.
2. Automobile Loans
Similarly to student loans, auto loans are another option when you have no credit or a bad score. If you don’t pay back the money that you owe, the lender may repossess the car. In addition to repossessing, there could be collateral with auto loans.
These types of loans enable you to purchase new or used motor vehicles, the loans are typically payable in 24 to 60 months. Most auto lenders ensure that their loans don't exceed a certain period of time and are valued using the price of the car.
3. Location-Specific Loans
There are also location-specific loans that can provide lending options for people in the area. Whether you’re looking for loans in Arlington, TX, Peoria, or San Diego, local lenders offer different loans to the people who live there.
Smaller lenders from specific towns and cities understand the local economy and the standard of living, which provides insight into what loans are appropriate for the location. Wherever you live, take a look into location-specific loans that can provide funds when you really need some extra money in your bank account.
4. A Co-Signed Loan
Another option when you are desperate for some money is to cosign with someone who has good credit. Asking someone who trusts you to put their credit score on the line will offer the lender peace of mind that the money will be paid back.
If you don’t pay the money back in the appropriate amount of time, the person who co-signed with you will be liable and forced to pay the money back or their credit score will suffer. If you have a plan to pay the money back in good time, you will be able to get a loan without decreasing the co-signer’s score.
It will also provide a way to increase the co-signer’s credit and build some of your own when you pay the money back right away.
5. Unsecured Personal Loans
While some secured loans can be acquired with bad credit, unsecured loans are easier to obtain in this situation. Since collateral is usually not used in these loans, they usually come with more requirements to qualify and be approved for the loan. They also typically have higher interest rates.
Unsecured loans are more dependent upon the factors other than credit score. Personal loans mostly require good credit, but unsecured lending will be more expensive and constraining.
Lenders vary quite a bit, but if you have no credit you can still get approved for a loan in specific situations. Your options are limited, but the above loans can be great ways to obtain some cash when you need it the most. Without credit, loans may require collateral, a co-signer, or a loan that doesn’t ask for a credit check.
Depending on the loan, you might be able to build your credit score. Make sure to pay back the money that you owe right away. Only then will you be able to increase your score and improve your financial situation.