Fixing Credit: Five Ways to Get a New Loan Even With Bad Credit!

A bad credit score is a major obstacle in obtaining a loan. You may have been experiencing financial problems, and resultantly, made late payments. Ultimately, you’re stuck with a poor credit score. But now you need a loan. Is it impossible to get a loan with bad credit?

The answer is no. First, your credit score might not be as bad as you think. Second, some lenders may still be willing to lend to you. Third, there are other options as well.

Here are five alternatives to traditional loans:

1.    Home equity credit

If you own a home and have equity in your property, you can get a loan. Not just that, you can get a low-interest, tax deductible loan which you can spend any way you want.

But keep in mind that choosing this option puts your house in jeopardy. Do you have a stable job or business? If yes, then you can pay off the loan in time. Be careful with your money and be extra savvy.

2.    Go for the credit unions

A credit union is owned by its members. They all have something in common. They might work in the same industry or live in the same area. These credit unions provide good service with lower charges.

Try to find a credit union near you. Call them up or meet with them in person. Discuss the possibility of getting a personal loan. Don’t decide until you’ve compared the rates of at least a few unions. Go with the one which offers lowest rates and good services.

3.    Peer-to-peer loan

P2P lending is an online option to borrow directly from a lender instead of an institution. Borrowers can get an interest rate as low as 6.5%, while lenders can gain as much as 10.5%.

The method is simple. Borrowers post a list of the amount they want and reasons for it. Lenders choose appropriate borrowers and check their credit. If your reason is strong enough, then your credit score won’t matter much.

4.    Family and friends

If nothing else works, you can ask your family or friends to help you. Don’t treat this loan any different from the one you would have gotten from a bank. In fact, have an agreement prepared which includes details for loan amount and payments.

5.    Ask for a co-signor

If your family and friends can’t lend you a loan, you might still ask them to become a co-signor. Choose a person with a good credit score who trusts you to pay the loan.

If a loved one or friend agrees to become a co-signor, be responsible for the payments. Any late payments will appear on both your credit reports. If you are unable to pay the loan, the creditor will ask your co-signor for funds.

One of the easy credit repair trick is to keep an eye on your credit reports. We have a number of resources and credit repair tips on our blog. Begin fixing your bad credit now!