If you need some extra cash to get through a temporary financial situation, some options do not necessitate the best of credit ratings. You should expect to pay a little more for the privilege, but it might be worth it if you don’t have any other options. Want to get a loan regardless of your credit history? Here are five options that might work for you.
Credit Union Loans
The best thing about a bad credit loan from a credit union is the flexibility they can afford you. This is because the process for a loan with these organizations is much less stringent than it is with a big banking institution. The next time you need to borrow money for a home improvement project, vacation, or starting a business, a credit union may be the perfect option.
Credit Unions are membership-owned, not-for-profit financial cooperatives for people who live or work in the same community. They exist to help their members and support the causes they care about. As a member, you have an equal say in how the bank is run and can vote in elections for bank leaders
Borrowers with bad credit can get a personal loan from a bank or other traditional lenders. However, the interest rates are often significantly higher. If you already have assets that you could pledge as collateral to secure a loan, then you may find that the rate is more favorable and still within your limited budget. This could be your home, or the title to your car, or anything else with tangible value. You should consult with an attorney to see which option is better for your situation.
Payday loans should be your last resort when it comes to borrowing money. It is not the same as taking out a loan from a bank or credit union and making monthly payments for a set period, such as 5 or 10 years. Payday loans, on the other hand, are prohibitively expensive due to exorbitant interest rates and fees. You can borrow up to $750, but you must be prepared to repay the loan with your next paycheck. If you do not do this, they have the right to charge you late fees and pursue you for the money. You can also read what Finanza says in their blogpost about this.
You may be able to borrow money with bad credit by using a credit card as collateral. Many have credit lines, and some even provide cash advances or cash equivalent. This works best for emergencies. The convenience comes at an increased cost. Credit cards charge higher-than-average interest rates than banks do. In addition, credit card loans tend to penalize more for late payments.
Pawn Shop Loans
A pawn shop can be one of the first places to consider where to get a bad credit loan. Pawnshops are plentiful, often found in regular brick and mortar buildings, and carry a more traditional feel than an online lender.
Borrowing from a pawn shop is secured, but the amount you can borrow is much smaller. Pawnshop loans are secured by an item you bring into the pawnshop. These items can be anything from a rare coin collection to jewelry or a spare set of car keys. The collateral you give is held as a security deposit until you repay the loan.