A bad credit history can really jeopardize your financial future because you might find it exceedingly difficult to secure a loan when you really need it. Having poor credit does not make you a terrible person; it simply means that you may be suffering the consequences of either poor decisions or unfortunate circumstances that have taken a toll on your credit score.
Ironically, sometimes the only way out of debt is by taking on a little extra debt and additional credit can be the hardest thing to come by when you cannot convince lenders of your credit worthiness. The following a just a few ideas for loan options for people with bad credit.
Borrow from Family and Friends
In most instances borrowing from friends and family might be the absolute last option, but it is commonly one of the only ways that people with really bad credit can access additional funds. Since friends and family are not going to go through your financial history with a fine-tooth comb or rely on your credit score to make the decision of whether or not you can borrow some money it makes sense to turn to them in your time of need. Of course, it goes without saying that these loans must be treated with the seriousness they deserve and a proper method of repayment must be finalised before the money is handed over.
Get Someone to Co-Sign on Your Loan
Another way for people with bad credit to access loans is to ask a friend or family member with a respectable credit rating to co-sign on your loan. You should never ask for this favor if you think you will not be able to meet the terms laid out in the loan contract because then this puts a strain on your friend or family member. However, in many cases lending institutions are overly cautious about what they are willing to lend based on set criteria that may not be reflective of your willingness or ability to repay.
Offer Collateral to Boost Your Low Credit Score
If you are in a situation where your credit score has been damaged because of recent defaults on loan payments that were caused by situations that no longer exist and you have collateral you can offer to secure a loan then this should certainly be done. For instance, you may have defaulted on a car loan because you lost your job, but maybe you have found alternative employment and your home has equity that you can tap, you can use your home to get the loan you need.
Approach a “Bad Credit Lender”
You must have seen advertisements for “bad credit lenders” before. These companies basically lend money at very high interest rates to people who cannot access loans using more traditional sources because of the state of their finances. If you are not averse to taking on these punitive interest rates then this could be an option for you as well.
There are a number of ways for people with bad credit to get loans. All you need to do is think outside of the box for your solution.