While it can take years to build a great credit score, it only takes a few weeks to lose all of your momentum. A single late payment or a collection account appearing on your credit report might not just tank your score – it can also hurt your chances of being approved for a traditional loan. Over the years, quite a few alternative loan options have become available for consumers with poor credit. Below are a few different alternative loan options for anyone with bad credit who needs a loan for important expenses.
Fast Lending Options for People with Poor Credit Ratings
When you don’t have a high credit score and positive payment history, you generally can’t walk into your bank and walk away with a cash loan disbursement. Most traditional loans take approximately 5 to 14 days to be funded, and you might even be required to setup future installment payments to come out of your bank account automatically. Loan Express offers fast loan approvals and loan disbursements because they accept applicants in all credit categories.
Look into Micro Loans and Peer Lending
Consumers with bad credit realize that their lending options are extremely limited. However, that does not stop them from having the same financial needs as their peers. While you can get approved for an auto loan regardless of your credit history, personal loans can be much harder to come by. Peer lending has gained in popularity, much because of the way it operates on a somewhat nostalgic, honor and reputation-based system. Those with credit challenges use peer lending websites to not only request funds, but also tell their stories. Higher interest rates are to be expected, but micro loans and peer lending also opens the door to bad credit borrowers who may have had nowhere else to turn.
Collateral Loans and Lending Options with No Credit Requirements
In the world of personal finance, your credit score determines how much you pay up front as well as on the backend. For instance, people with higher credit scores receive lower interest rates on loans. If applying for a credit product like a car loan, better credit scores mean lower down payments and oftentimes other perks. Personal loans that are backed by collateral are available to consumers who have lower credit scores. The collateral could be a car, as is the case with title loans, or even the deed to a piece of land if you are looking for higher loan amounts. There are a few no credit required loan options, like payday loans and cash advances. Note that other criteria, such as having a source of income and a bank account are required for almost every loan product available.
It is much harder to be approved for credit products when credit is a concern. On the other hand, there are still alternative loan options available to consumers, even in the worst credit situations. Know what your actual credit score is before applying, so you have a better understanding of your chances for approval.