When your credit score is on the bad side, finding a suitable personal loan may take time not to mention that process is also full of hassles. Your poor credit rating is an implication of your poor payment history and other key financial factors lenders consider when assessing loan application. The bottom line, you’ll be tagged a high-risk borrower hence the high likelihood of rejection.
Since most lenders are really only out for profitability, you can’t really blame them. But one or a couple of rejections doesn’t mean you should lose hope. Even if you have a poor credit rating, there are loan alternatives you can check out. You’ll just have to deal with the consequences a bad credit may bring but you’ll be able to avail a personal loan in exchange. Here are some options you can consider if you’re dealing with a financial emergency:
1. Credit union
If you’re a credit union member, you need not look elsewhere for quick cash. Credit unions offer loan amounts for its members at lower interest rates. So long as you’re employed and you have a source of steady income, your credit union can lend you a modest amount to tidy you up until you’re more able to manage your financial needs comfortably. The best part about credit unions, cost is borrower-friendly.
2. Credit cards
If credit union is not an option in your case then you can always resort to using credit cards. While many experts may advice you from using your credit cards, there are just circumstance when you have to do what you need to do. In cases of financial emergencies, credit cards come handy. The interest rates will be steep naturally but like credit unions, credit cards can help you deal with pressing financial matters at hand. Credit cards are especially helpful if you have bad credit and you have nowhere else to turn to.
3. Peer to peer lending
Peer to peer lending is another type of borrowing money that’s becoming increasingly popular in the UK. Rather than go to a bank, you can borrow from an individual or a “peer.” That means a direct transaction with the lender no middlemen hence lower interest rates. There’s a catch though. The lender decides whether to lend you money or not. Some lenders may consider your credit rating while others just need to look at your financial capability to pay. Your job is to look for a lender willing to take you on even if you have bad credit.
4. Guarantor loans
If you know someone with good credit history and who’s willing to co-sign the debt agreement with you then you might want to consider applying for a guarantor loan. Guarantor loans are another type of personal loan where you are required to bring a guarantor into the picture. Only the guarantor is required to have good credit. If you’re the borrower and you have bad credit, all you need is an eligible guarantor to avail this loan type.
5. Logbook loans
If the aforementioned options wouldn’t work for your situation, the last alternative you may want to look into is a logbook loan. To avail the loan, all you need is a vehicle to secure the loan against. So long as said vehicle is free of any financing plans, you can borrow a large amount of money with this type of personal loan. And the best part, there are now logbook loans 24/7 so you can avail the product even on weekends. Just complete an online application form, wait for approval and receive the money in a matter of 24 to 48 hours.