In America, personal loan debt has reached over $125.4 billion.
While you may not want to have more debt, sometimes it’s necessary.
Lenders use your credit score to determine your creditworthiness. But what if you have bad credit? Here are quick tips for getting loan approval.
Look Into Credit Unions
Credit unions may be a good place to start looking at a lone approval if you have bad credit. That’s because a lot of them are willing to work with people who have bad credit.
Credit unions are typically smaller banks and are focused on their community. You may get a more personal approach when it comes to reviewing your application, and they can get to know you rather than just making a decision based on your credit score.
There is typically a more human reaction when it comes to credit unions.
If you can’t find a good credit union, then try checking out local and small banks in your area. They will also have a focus on the community and may be able to offer lower, more reasonable rates as well.
Check Out Online Lenders
Online lenders may also be a good place to start.
There are two different kinds of online lenders: peer-to-peer lending services and marketplace lenders.
Peer-to-peer lenders have you borrow from individuals online rather than a bank. While these people aren’t trying to lose money, they may be more willing to take the risk with you than a bank would.
A marketplace lender gets the money from other lenders and sources. A marketplace lender is also not your traditional bank, and they have different approaches to estimating your credit history.
Find a Cosigner
You could always ask your friends and family to loan you money, but they may not be willing to do that.
However, they could join your loan as a co-signer.
If a bank won’t offer you a loan, you could have someone with good credit co-sign your loan, basically guaranteeing that if you don’t pay back the money, they will take that responsibility from you.
This can be risky, but if you have someone willing to do it, it may be a good option to look into.
If you have a bad credit score, offering other collateral may make banks more willing to offer you a loan.
When you offer something of value, this shows the lender that you are taking this seriously. They are also more inclined to grant it because they know that they have an option to get money if you really don’t pay the loan back.
However, you need to be careful when offering up different collateral. For example, you probably shouldn’t offer up the equity that is in your home because you may be forced to leave it and foreclose it, which could make your situation even worse.
Get Your Loan Approval Today
Don’t let your bad credit discourage you, you could still get loan approval.
There are many different options out there for you.
Check out this blog for more information on how to get a loan with bad credit.