How to Get Loans – Tips For People with Terrible Credit

It can be quite a great challenge to get a loan if you have terrible credit. Almost always, people with terrible credit are turned away by banks and other financial institutions. However, all of that has changed. There are now more lending companies which cater to people who have bad credit. Some of the options include companies which specialize in lending to people who have bad credit and loans which require collateral. Take some time to examine all your options for loans for terrible credit.

It is important to get copies of your credit report. You can get a free copy of your credit report annually from one of the three credit bureaus, TransUnion, Experian and Equifax. Even though you are already aware that you have terrible credit, you still have to be sure exactly how negative your score is. It is also very possible that your report contains errors and if this is true, you have to correct them before you apply for a loan.

If you dislike getting a loan, you can borrow from your 401K but this is highly discouraged. You could get penalties from doing this, plus your 401K is meant for your retirement years, it should not be used before that.

Try borrowing from your friends and family. This practice has been branded as social lending. Family loans are now looking more like formal transactions. They now come with payment schedules and signed documents. Borrowing from friends and family do not require any credit check so you do not have to be worried about your terrible credit score.

If you are having a hard time getting a loan, you can put up collateral. Collateral is property of value which is used as security for the money taken out on the loan. Make a list of all your assets which you can use as collateral. A few examples of things which can be used as collateral are cars and houses. See the loan officer at your local credit union and explain your situation and how much you need. You can also ask the loan officer to refer you to other lenders who can help you. Contact the lender to which you have been referred.

Your last resort is to get a payday loan. The reason this is last is because this will cost you the most money. Even the Federal Trade Commission believes that this should only be taken out when there is no other choice.  You have to exhaust all your options first before you even think about getting a payday loan. Payday loans again, have high charges and they are to be paid in full on just 14 days or on the person’s very next payday. Although the loan can be extended or “rolled over”, it will cost you even more money. Charges can go up as much as 391 percent and that is indeed a lot of money. Payday loans do not require and most lenders release the money in less than 24 hours. These are just some of the things which make them very popular.

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