LOS ANGELES, Sept. 25, 2020 /PRNewswire/ -- For people who have poor credit, getting a loan might feel impossible — but it doesn't have to be. There are a variety of trustworthy loans borrowers who might be able to get loans even if they don't have a perfect financial history, depending on their needs and concerns. Here are some of the loan options cash-strapped borrowers should research if they have less than flawless credit:
1. Secured loans
A secured loan is an option for people who have assets like a home or a car. It means that a loan is backed directly by those assets, which are used as collateral. A secured loan is an option borrowers should consider if they have poor credit and need a substantial loan, but it can be risky when it comes to protecting assets.
2. Online lenders
As with everything else, banking has also been going digital. Online lenders can be much more competitive than their traditional counterparts, offering fast and easy loans. However, these loans do typically still come with a credit check, although the barrier to entry is often not going to be as high as with a big banking institution.
3. Same-day loans
People might be able to get installment loans and title loans the same day one asks for them, and possibly without a credit check. These can be a useful option when money is needed ASAP, and as loans for people with bad credit or fair credit, and/or if a borrower might not qualify for the above categories of loan for different reasons.
Reach out to a potential co-signer
Another option for someone needing a loan and unsure about their options is to see if there's a potential co-signer in their network who would be willing to work with them on a personal loan. Co-signers should have great credit and a solid employment history to help make them a more credit-worthy applicant for a loan.
Being a co-signer is a huge commitment, so this requires a very trusting relationship with their potential co-signer. When asking someone to co-sign a loan, the borrower should be ready to show how they're going to pay back the loan with a solid, clear plan. The more prepared and honest, the easier the conversation will be.
Work on improving credit for the future
In the long term, it's great for borrowers to take this as an opportunity to improve their credit and overall financial health.
When people learn more about how credit works and how they can build their credit for the future, that will quickly pay off in terms of lower interest rates, better credit card offers and more.
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your current financial circumstances.
SOURCE Advance America