4 Lending Alternatives for People with Bad Credit

Written by Karen Bryan

It’s very easy to enter into a state of despair when we find out we were rejected for yet another credit card or personal loan. Loans are often a final resort to get out of an already precarious situation, and bad credit is usually a result of it. But the good news is that there are more avenues than ever for people with poor or no credit to access secured and unsecured loans with reasonable rates. Here are some lending alternatives for people with bad credit.

Think About Getting Home Equity Line of Credit

This is for those who are lucky enough to have enough equity in their property to consider the option. If you are one of those people, there is always a chance that you could qualify for a line of credit. However, the only catch is that you will be betting your home against it, which could put you in an even more stressful situation. If you however have a steady income and feel like you have the discipline it takes to make payments, then this could be a solid option, irrespective of what your credit score is

Look at No Credit/Bad Credit Lenders

Bad credit lenders often get a bad rap for many reasons. Many decry the seemingly high rates they charge, but they’re often the last resort many people have. These kinds of lenders also take extraordinary risks by offering unsecured and secured loans to lenders with poor or no credit.

Whatever you do, make sure that you check the reputation of any lender you work with and try to work with lenders directly, not brokers. Working directly with lenders takes away the middleman and usually results with lower fees. Lenders like Opal Loans for instance have been offering unsecured and secured loans for people with low credit for years and allow people to borrow up to £250,000 over 1 to 10 years. So, don’t hesitate to consider non-traditional lenders because of the few bad stories, they are often the best solution for loans with reasonable rates for people with credit issues.

Consider Credit Unions

Credit unions are another viable option for people with less than stellar credit. However, if you don’t have good enough credit to get accepted with a regular institution, don’t just expect any credit union to accept you with open arms. Make sure that you look at as many credit unions you can in your area and try to get to know them better. Make sure you understand their vision, you’ll understand soon enough that different unions have very different vocations, and some might be more lenient towards your situation than others.

Peer to Peer Lending

Peer to peer lending is another option that you could consider if you have questionable credit. While it may seem like a new concept, peer to peer lending has been around since 2005 and allows people to get unsecured loans unsecured loans from individuals online. The situation is a win-win for both lenders and borrowers since lenders get to pay minimal interest fees while lenders can get a higher return than they would through a deposit account or financial instruments like certificate of deposits.

However, do not assume that peer to peer is a free for all. They often have very stringent admission criteria. And just because credit score is not always the main criteria, it will usually be part of your profile and potential lenders will more than likely take it into consideration as well.

 As you can see, there are still ways that you can secure financing even with a bad credit score. If you consider the options outlined in this article, you might be able to find the financing you so desperately need.