If you are applying or considering to apply for a loan, then having good credit is mandatory. However, there are many people who have no credit or extremely poor credit. If you are one such person, then you must know that getting a loan for yourself can turn out to be quite a difficult task. This is because since you have a poor credit, you are regarded as a high risk individual who has high chances of defaulting when making payments for the loan is considered. Until and unless you improve your credit, not many financial institutions will be willing to grant a loan to you.
However, this is not the end. If you wish to get a loan but do not want to pay skyrocketing prices for it, here are some alternatives that you must definitely consider.
Try home equity as a line of credit – If you have a lot of equity in the property that you own, then this could very well work out as a method of getting credit. You can easily get a low interest and tax deductible line of credit based on the equity of the property. However, there is a slight catch here as it puts your property at risk. However, if you have a good and steady income, then you do not need to worry about this at all.
Go for credit unions – If you have been turned down by banks, then what you can do is go and seek the help of credit unions. Credit unions are very much like banks and other financial institutions, but they are owned and managed by its members. They are basically not for profit organisations that provide their earnings in the form of loans at a much lower fees to the other members of the union. Thus, you could go and seek the help of a credit union that you know of.
Get a peer to peer loan – This method of getting loan has become very popular since 2005. It is basically an online platform that helps you borrow funds from an individual rather than any organisation or bank. You can simply state the amount that you wish to borrow and the reason behind it. Any person who is willing to put up their money for loan can check your profile out and then grant you the loan based on the interest rates, etc. Since you are borrowing from an individual, the interest rates also tend to be lower than that of the banks and other institutions.