When a consumer has bad credit, he or she will have a hard time landing personal loans. When this happens, some borrowers turn to expensive borrowing methods; other times, a person will have no options and will not get the money needed. However, with these five options, a person can get bad credit loans he or she desires.
Local bank: When going to a local bank, a customer will have a better chance at success. While larger banks look solely at the numbers, a community bank will have the personal touch. When sitting down with an employee from the bank, a client can give his or her reason for having poor credit. If it is the result of bad luck such as a medical bill, a borrower may have an easier time getting the money he or she desires. This is especially advantageous when a customer has been with the bank for a long time. Remember, while credit score is a huge part of the equation, the human touch can go a long way in getting a personal loan.
Store credit: When buying a gift for Christmas, a shopper can usually put the item on layaway or use a store credit card. When doing this, a person with poor credit can qualify for a small loan. This is especially true during the holiday season when stores want to get merchandise off the shelves. However, this is only useful when buying an item at a given store.
Family and friends: Often, a person with a bad credit score will have friends and family who can loan them money. This is the perfect option when a borrower does not need a lot of money. Of course, when borrowing from friends, a borrower should still write up a legal contract and do everything with paperwork. This will help people avoid problems in the future if any problems occur. While this is a great method, a person should exercise caution and not take advantage of people just because they are friends. Remember, this is beneficial for both sides as the person lending the money can make a profit while helping out his or her friend.
Someone with excellent credit: Often, a young person without established credit will need a cosigner. This is also the case when a person has poor credit due to previous poor choices. When looking for someone to cosign, one must remember to find a person with good credit; otherwise, the plan will waste time for both people. Now, the cosigner must realize that he or she will have to pay the loan off if the original borrower does not make payments. Otherwise, the cosigner will see his or her score drop drastically since missed payments are detrimental to a good score.
Peer lending: When looking for personal loans, a consumer should head to a peer lending site. Here, a customer can borrow money at a decent rate. When signing up, a customer should list their need for the money and the interest rate they want to pay. If there is a match, a client can borrow money for his or her needs.
Bad credit loans are hard to come by, but not impossible. With these five simple tips, a borrower with a poor credit score can still land a loan for the upcoming holidays.