Having good credit history has several advantages and not having a sound credit score might pose to be a problem especially when you need financial aid at any point of time. However, if your credit report is not very good, you still stand a chance to avail loans.
In this article we will find out the different avenues of financial aid in form of loans and other lines of credit if your credit report is not something to boast about. So, read on.
Types of loans with poor credit
Even with bad credit, you can avail credit in the following ways-
Home equity line of credit (HELOC)
In order to avail this type of loan, you need to be a homeowner. This is because the equity locked in the home can be used for applying for credit. However, in this case, you are using your house as security.
Since you are offering the loan servicers house as collateral, you are safeguarding their investment. As such, majority of the loan service providers would want to work with you.
This is an alternative form of credit that you can avail with bad credit. However, in this case, you will have to approach the individual lenders and not any banking or any other financial institution for the credit.
There are websites that you can browse through and find out the norms in order to enjoy such credit or loans. However, you need to keep track of the stricter norms that govern the eligibility criteria of these loans.
As mentioned above HELOC, is a type of secured loan. Aside from your home, you can also use your vehicle or any other asset as your collateral.
One of the biggest advantages of secured loans is that you qualify for the loan despite having bad credit, the rates of interest are usually not so high, and most importantly, duration of the loan period is longer. So, you get more time to repay the loan.
Financial aid from other family members
There is another option for availing financial aid if your credit report is not something that you can talk about.
You could approach a family member or anyone among your relatives if you want cash. It can be short loans or loans for a slightly longer period. As far as the duration of repayment is concerned, it entirely depends on the rapport you share with the person in question.
In order to make the contract official, you could also give him an assurance in writing or work out a legal contract. Another advantage of this type of loan is that you don’t have any paperwork to complete and you get access to instant cash.
As such, having bad credit doesn’t stop you from availing loans from other avenues but it is still important to set your financial records straight as soon as possible in order to enjoy better privileges in future.