There are several reasons why people take loans and the most common reasons include settling sudden medical bills, emergencies such as car repair, purchasing a new home or even for home repairs. There are other many reasons why people can take loans and some of the reasons are personal. Personal loans are sometimes hard to get especially when one has a poor credit score. Here are the 7 best types of loans for people with bad credit.
It is important for those people who own homes to know that they can get a loan even with bad credit. Why do you think this is possible? There is no risk involved when you given a loan to a person with bad credit because the home will act as a collateral. A home equity bad credit loan can be given but you have to secure a tax deductible liner so that you can pay at a reasonable interest.
Bad credit loans
If your credit is bad then it is important for you to know that the only remaining option for you is to take a bad credit loan. Getting loans with bad credit is sometimes risky because you might end up in an endless cycle of debts that you cannot be able to finish paying. In most cases the bad credit loans attract interest rates that are higher and therefore you have to be keen before you decide to go this route.
Credit Union Loans
When you have a bad credit history it is very hard for you to get a loan from a bank but it is very easy for you to get one from the credit unions because of the fact that they have relaxed standards. Becoming a member of a credit union is very easy and also getting a loan from them is very easy despite the fact that the interest rates might be high. However it is important for you to know that loans for poor credit require one to have a security so that you will not run away and stop paying your loan.
Peer-to-peer loans are one of the latest means that is used to borrow money. This is one of the most reliable means that you can use to get a loan. These loans are usually shielded from the peer-to-peer lending sites such as the perform, prosper, lending clubs and many others. Here you are allowed to obtain loans from the lenders who are found on websites.
Here you are supposed to give something that you own to act as a security or collateral. Such a loan must be backed by some assets that are of value such as a vehicle, or your home. That is the only way you can get a loan with bad credit.
In this case you use a friend or a family member to cosign for you a loan so that you can be able to pay at a better interest rate for a good loan term. Sometimes it may be hard to get a cosigner when you have poor credit loans but if you can convince a family member it can be okay.
You can also get a loan from a friend or a family member
In this case it doesn’t depend on the credit score to get a loan from a family member or a friend. Getting a loan from a close friend may seem difficult because there is a relationship risk but this should be your last option.