Are you suffering from a bad credit score? Are you struggling with getting financing? Then you’re not alone. The average American has a credit score between 300 to 649, indicating a poor to fair rating.
If you’re on the lower side of the spectrum, you’re likely not having a good time getting financing because getting approved for a loan is difficult when you have a poor credit score. However, don’t fret, as there are several options you can explore for personal financing.
These options range from easy to super easy, as most have little to no credit checks. However, they have pros and cons, so let’s delve into that.
Payday Loans
Payday loans are short-term loans meant to be paid in full the next time you get your salary, hence the name payday. At first look, they have quite a bad reputation since they are a common source of being in a spiral or additional fees and repayments, especially if you keep on neglecting repayingment. Some people even call it predatory, but we disagree, as it’s just a matter of being responsible with your repayment.
But we digress. Most payday lenders don’t check the borrower’s creditworthiness, but if they do, it’s just for formalities. That said, with a CreditNinja.com Payday loan, you can typically borrow as low as $100 to $10,000.
However, payday lenders are known to have steep interest rates, so it should be in your best interest (pun not intended) to repay your payday loan as soon as possible.
Car Title Loans
If you have a car that you don’t use that much and that’s also working, you can get a car title loan. A car title loan is a type of loan where you put up your car as collateral.
The loan amount will be based on how much your car will sell in the current market, which means it will be appraised for its true value. Most car title loans have short repayment periods of up to a month, and most loans generally start at $100.
However, they also have high-interest rates because they have short repayment periods. But if you’re looking for fast and easy financing, car title loans have your back. Just make sure that you have the title on hand. Lastly, since your car is up for collateral, it means that your car will be repossessed if you fail to repay the loan.
Co-signed Personal Loans
Co-signed personal loans work just like personal loans, but the key difference is that you’ll have someone with you as a backup.
Usually, the interest rate will be up to your creditworthiness, but since you have a backer to serve as a co-signer on a personal loan, it can be negotiated. This is a pretty common source of financing for people who are still building their credit score, but it can also be used for people with bad credit. This is also very optimal for teens since they can make their parents or guardians be the co-signer for the loan.
Secured Personal Loans
Personal loans are usually unsecured, but you can negotiate with your lender to secure them with one of your valuables. Secured personal loans work just like a regular one, but you have something up for collateral this time.
People usually offer something for collateral to lower their interest rate and increase their borrowing limit. We mentioned car title loans earlier, and their principle is the same. The only difference is that secured personal loans can take collateral in the form of anything valuable, like jewelry, gadgets, etc. You can even say that car title loans are under the category of secured personal loans.
Home Equity Loans
If you think that home equity loans are also personal loans, then you’re quite wrong. It’s much more complicated than that. Home equity loans or HELOCs are a type of their own since there are a lot of factors that you have to consider. That said, if you have built equity on your home for quite some time now, you can borrow against it.
Usually, your house will be appraised based on its current value in the market, subtracted by the equity on it, and then you have your HELOC. You can usually get bigger loans on it, but you have to remember that if you fail to repay the loan, your house has a good chance of getting repossessed or even foreclosure. That said, you must consider the pros and cons before getting one.
Final Words
Poor credit is a huge challenge, especially if you’re looking for personal financing. Luckily, there are several options you can opt for if you’re looking for a fast and easy source of money. Just remember to consider the pros and cons of each option we discussed, and you’ll be fine.
