In the U.S., 43 million people have a credit score below 600. With so many people having bad credit, there have to be loans out there that they can use, right? In fact, there are quite a few!
Do you need cash now with bad credit? If you have bad credit, it isn’t the end of the world. There are still plenty of loan options out there for you.
Need Cash Now With Bad Credit!
If you have bad credit it can be hard to get approved for a loan. Below we are going to review different types of loans you can get with bad credit.
Home Equity Loans/Lines of Credit
If you own a home this could be a good option for you. The equity aspect of this loan combines the value of your home and the amount you still owe on it.
Depending on the value of your home, it can outweigh your bad credit score. These loans can be used to make improvements in your home, for college tuition, credit card debt, and more.
A home equity loan is like having a second mortgage. You will be using this equity to secure yourself a loan. You will be putting your house up as collateral.
This gives the bank security if you don’t end up paying them back. This can be very bad for you. If you don’t pay back on time you could find your house being foreclosed.
Make sure you can pay it back if you decide to get this type of loan.
Bad Credit Loans
Even if you have terrible credit, you will be able to get a bad credit loan. With this type of loan, you will have higher interest rates compared to other types of loans. This is especially true if you have really bad credit.
You may be limited on the amount of money you can receive if you are considered a higher risk.
There are two types of bad credit loans. They are secured and unsecured loans.
You will need to offer some form of collateral before you can receive this loan. For example, your house and car can be used as collateral.
With unsecured loans, there is no collateral. You will sign a contract which will lay out the terms of the repayment plan. If you do not repay the loan legal action can be taken against you.
Depending on the situation, it may be safer to get an unsecured loan. This ensures you aren’t losing your house or car in the process.
Credit Union Loans
Another option is getting a loan through credit unions. Credit unions aren’t banks. They are more likely to be sympathetic to your needs. They won’t just look at your credit history.
They have more relaxed standards and fewer fees than a bank. Yet, you may be more limited on how much money you can get.
Peer-to-peer loans allow you to secure a loan through a lender. You don’t need to use banks or financial institutes.
These lenders will look at your credit score, financial history, and employment history. Based on what they find will determine if you receive a loan.
Yet, depending on where you live you may not be able to get this loan. It is not offered everywhere in the United States.
On top of that, they are more likely to approve loans if you have a credit score of 600 or above. If you are below that you have less of a chance of getting a loan from them.
If you can get someone to co-sign your loan, you will have a higher chance of getting a loan. With a co-signed loan you can also get lower interest rates.
You want to choose someone who has good credit of course.
Make sure you can pay back the loans, otherwise your friend/family member will be paying the price. They will have to pay the debt and it will hurt their credit score.
Start Looking Now
If you need cash now with bad credit, review the loans and see which best suits your needs. Depending on what you need it for, and what the pros and cons are of each, will determine what is best for you.
If you want to learn more about how loans can help you, check out our blog.