Millions of people in the United States have bad credit. This is usually because they have not taken the time to build up their credit history. There are various reasons someone might have bad credit, but it can make life very difficult. Getting approved for a loan or renting an apartment can be challenging. Of course, it’s best to never take out a loan unless that’s the only option. If it is the only option, thankfully, there are loans available for those with bad credit. Here are some of the different types of loans that are out there.
1. Hard Money Loans
Hard money loans are one option for those with bad credit. With a hard money loan, the lender is not basing the loan on your credit score. Instead, they are looking at the value of the property you use as collateral. Hard money loans can be a good option if you have bad credit but own a piece of property. The downside to hard money loans is that they often come with high-interest rates and fees.
So if you’re thinking, “What are hard money loans used for?” Here’s a quick answer, Hard money loans are usually used for short-term financing. They are a good option if you need to get a loan quickly, but they come with high-interest rates and fees.
2. Peer-to-Peer Loans
Peer-to-peer loans are another option for those with bad credit. With a peer-to-peer loan, you borrow money from another person or institution rather than a bank. A few different platforms offer peer-to-peer loans, such as Prosper and Lending Club. The interest rates on peer-to-peer loans vary depending on the platform you use and your credit score. However, they are typically lower than the interest rates on hard money loans.
3. Personal Loans from Credit Unions
If you have bad credit, you might be able to get a personal loan from a credit union. Credit unions are nonprofit organizations that offer banking services to their members. They typically have lower interest rates than banks and might be more willing to work with you if you have bad credit.
To get a personal loan from a credit union, you will need to become a credit union member. This usually requires that you live in the same area as the credit union or work for a specific employer. Once you are a member, you can apply for a personal loan. The interest rate on your loan will depend on your credit score and financial history.
4. Secured Loans
If you have bad credit, you might be able to get a secured loan. With a secured loan, you put up collateral, such as a car or piece of property, to secure the loan. The lender can then seize your collateral if you default on the loan. Secured loans typically have lower interest rates than unsecured loans, but they are still risky. If you default on a secured loan, you could lose your collateral.
5. Payday Loans
Payday loans are another option for those with bad credit. With a payday loan, you borrow a small amount of money and agree to pay it back when you get your next paycheck. Payday loans can be a good option if you need cash quickly and do not have any other options. The downside to payday loans is that they often come with very high-interest rates and fees.
6. Title Loans
Title loans are another option for those with bad credit. With a title loan, you use your car as collateral. Title loans can be a good option if you have bad credit but own a car. The downside to title loans is that they often come with high-interest rates and fees.
7. Credit Cards
There are a variety of credit cards available for those with bad credit. With a credit card, you borrow money from the lender and agree to pay it back over time. Credit cards can be a good option if you have bad credit but need a way to build up your credit history. The downside to credit cards is that they often come with high-interest rates.
There are a variety of loans available for those with bad credit. Hard money, payday, personal, and title loans are all options. Each has its own set of pros and cons. Be sure to do your research before choosing a loan. If you have bad credit, loan options are still available. Talk to a lender about your options and find the best loan for your situation.
SUBSCRIBE FOR MORE! HERE'S WHY:
1. You get 7 free books
2. You get the best money & productivity articles
3. You get the latest updates - all in one email per week