Just because your credit score is not up to snuff does not mean that you are not eligible to receive a loan that is reasonable. Your rates will most likely be higher but you do not have to break the bank if the need for a loan comes up. As is the case with any major decision though, you should do your due diligence before committing to any major obligation such as a loan, especially if you are getting an unconventional loan due to your credit score.
Is Your Credit Score Truly Low?
If you have been denied credit and you are not sure why, it may be worth your while to request your credit report from one of the three major credit bureaus. There are many instances of mistakes being made on individual’s credit reports that can be fixed relatively simply. Especially since the rate you obtain from a good credit score versus a bad credit score is significant, going to this extra effort can be well worth the time in terms of money saved.
Alternatives to Big Banks
Fortunately, this day in age there are plenty of options available aside from large banking institutions. This can come as an advantage as it is often the case that large institutions may base their approval of a loan on only a few factors such as a credit score. A credit union on the other hand is much more personal and therefore likely to extend a line of credit based on other factors.
There are multiple other online services that offer lines of credit. Often times these are smaller establishments that are more likely to fight for your business and therefore offer lower rates than larger institutions.
Friends & Family
If is oftentimes not advised to involve family and friends in matters of your personal finances. Depending on your circumstances though, this may be one of your only options. There are smart ways to go about working out personal loans with friends and families so that the likelihood of a falling out is decreased significantly. Another reasonable option is to simply use a friend or family member with good credit as a cosigner on your loan.
Home Equity Line
If you are in the position of owning your own home and have built up a significant amount of equity, this may be a great option for your needs. In these instances, your home is basically used as collateral on your loan. However, as long as you don’t default, you have secured a relative low interest, tax deductible line of credit.
Things to Consider
Just because an offer seems like a great option, it may not be all it is cracked up to be. As is the case with any major decision in life, make sure you know all there is to know about the details of your loan. After all, your signature denotes a legal contract between you and another entity so you want to make sure you are agreeable to all of the terms.