A credit score ranges from 400 to 800. Those of us with scores under the 650 mark have a hard time qualifying for loans. You need to know where to look for a loan even if you have less than perfect credit. Hard money loans can be hard to find as well. There are a few places you can look however that can help you get the cash you need.
Loan companies for bad credit
Bad Credit loans saw on television commercials and all over the internet are easy to find. Be careful though that you don’t pick one that will put you in a bind and has unrealistic terms. Look for a company that will help you get the funds you need to be matched with realistic terms.
HELOC
HELOC stands for a home-equity line of credit. For some people, their credit may have recently become tarnished. Maybe the loss of a job or a tragedy occurred which made things go bad. A HELOC loan lets customers against the equity of their home. The LTV or loan-to-value that most companies allow is a loan for 80% of the equity value. This type of loan will only work for those who have paid equity into their loan. The terms and rates for this type of loan are pretty similar for those with good and those with bad credit.
Co-signer
One of the options that most people look to is having a co-signer. A co-signer can be anyone. It doesn’t necessarily have to be a family member. It can be a close friend if needed. Having a co-signer means knowing someone that has better credit. They agree to sign the loan with you as a backup for the loan company. Most people who get co-signers get the same good rates as someone who has good credit.
Credit Union
This is another option for hard money loans. If you are a member of the credit union then there are many upsides to that membership. One of them can be a credit union loan. Not only do you have a better chance of getting a loan from the credit union but they have great rates. Being a member of the credit union gives you access to cheaper rates. There is also more availability. This is because they are a non-profit organization and have easier terms as well. You may even have the option of an unsecured loan through the credit union as well.
Peer to Peer loan
A peer to peer or otherwise known as P2P is an option that has not been out there that long. This is an opportunity where people with bad credit can borrow from investors. This is an option to use instead of large banks. Customers match up with individuals who can offer the ability of a peer to peer loan. Many times these come with great loan options and rates no matter what the person’s credit may be.
Family and friends
There is always the option of looking to family and friends to borrow the money. This offers an option that will be simple and straightforward and better than bad credit loans. This option has no paperwork or hoops to jump through. Most of the time there is no added fees or interest to the loan either. Be prepared to pay this person back though, no matter what. Even if it is in payments. Arrange a payment that works for both parties and makes sure to keep that arrangement. Look at it as a bank loan in those terms. If you fail to meet the agreement then you could damage your relationship with that person.
Payday and title loans
Both of these options are short-term options. If you own your car then you can go to a title loan place to get funds based on the worth of your car. Remember to only borrow what you need though. Interest rates on title loans can be high. Payday loans are a short-term fix for many people. It’s not meant to be long-term only until your next paycheck. You must have a bank account to get a payday loan.
Retirement loan
Have you been at your job for a while? Do you have a 401K or IRA account? There is always the option of borrowing against it. Remember that it will penalize you though. You will also have to pay taxes at the end of the year and at the time of withdrawing for the money you take out.
There are plenty of options for people with bad credit to get the funds they need. Make sure you pick the best one for your situation and remember to make the payments on time.