5 Ways to Get a Loan with Bad Credit
Put money in your pocket using these lending alternatives, even if you have bad credit.
Option #1: Use a Home Equity Line of Credit
If you have enough equity in your property, you could get a low-interest, tax-deductible line of credit to spend any way you like.
Of course tapping your home equity puts your property in jeopardy if you can’t repay the debt. But if you have reliable income and are disciplined about paying down an equity line, it’s an inexpensive option, regardless of your credit score.
Compare loans from several institutions so you know you’re getting the lowest interest rate possible before you sign the final paperwork.
Option #2: Apply to Credit Unions
Credit unions are similar to banks but are owned by their members, who typically have something in common—like working in the same industry or living in the same geographic area. Credit unions are nonprofit organizations that pass along earnings to members in the form of lower fees and higher customer service.
Visit findacreditunion.com to locate a credit union near you and give them a call to discuss getting a personal loan. Compare loans from several institutions so you know you’re getting the lowest interest rate possible before you sign the final paperwork.
See Also: 5 FAQs About Your Credit
Option #3: Get a Peer to Peer Loan
Peer to peer or P2P lending has been around since 2005. It’s an online platform that allows you to borrow directly from an individual instead of from an institution. Peer to peer lending is growing in popularity because it’s a streamlined process that’s a win-win for borrowers who pay low interest rates and investors who earn high interest rates. Right now, you can borrow for as little as 6% and earn an average return in the double digits—that’s pretty impressive.
Borrowers post a loan listing that includes the amount they want and why they want it. Investors review loan listings and choose the ones that meet their criteria. Peer to peer lenders screen all applicants and check your credit, which becomes part of your loan listing. So while your credit score is still a factor, an individual investor may be more empathetic to your situation than a traditional bank.
Check out these peer to peer lending sites for borrowing or investing:
FREE RESOURCE: Online Loan Comparison Chart (PDF download)