You are just starting to build up your credit score after suffering a bankruptcy, but it is still too low to qualify for a sizable loan. Living in financial purgatory doesn’t have to be a life sentence if you take the time to review all the options available. North Creek Financial wants you to climb out of debt and return to financial independence with these five way to get a loan for bad credit:
Credit Unions
When the bank only sees you as a number, a credit union will sympathize with your situation. Credit unions are smaller than the banks, therefore they are willing to qualify you for a loan because their ownership structure is different. This is because banks have customers, while credit unions are owned by its customers, which are called “members.” However, joining a credit union requires being part of the “bond,” which are usually based on characteristics such as geographical location and religion. Learn more about credit unions.
Private Financial Institution
A private financial institution is your best bet to qualify for a loan with bad credit. Private lenders are a group of investors that want to see returns on a loan, this means higher interest rates, but is the most reliable alternative to finding a mortgage outside of the big banks.
Online P2P Lenders
Peer-to-peer lending services have been around since 2005 and are similar to private institutions, however they tend to be individuals or a small group that offer loans online. The interest rates are much lower than at banks and credit unions, while also not requiring you to pledge collateral to get approved. This type of loan is the most flexible, however do your research as this online loan for bad credit requires sensitive information such as your Social Insurance Number.
Use Your Home Equity
If you have sufficient equity on your property, you may qualify for a low-interest, tax-deductible line of credit or a mortgage loan for bad credit. Some financial institutions may accept other types of collateral to secure a loan, but to get a lower rate loan for bad credit usually requires the use of your home. However, it is imperative that you do not default on this loan as you risk losing your home. Therefore, if you have reliable income and are confident the loan can be paid back on time, then it’s an inexpensive option you should consider. See if you have enough equity in your home today to get a loan with free and quick online pre-approval.
Co-Sign for a Loan
If a family member or friend are unable to provide you with a loan, then perhaps they’d be willing to co-sign with you for a bank loan? Your co-signer will have to put a great deal of trust in you because if you are unable to pay back the loan, then the bank will go after the other for the full repayment.
