3 Ways to Get a Loan Even with a Low Credit Score
Your credit history and credit score rating are two of the factors most lenders look into to either approve or disapprove your loan. This situation can be frustrating if you have no credit or have a low credit standing. However, there are still ways to get loan approval even if major lending companies have turned you down for being a high-risk borrower.
Here are 3 options you can try:
Borrow from a friend or family.
If you have failed to secure a loan from institutions such as credit card companies or banks, you can turn to a family member or a friend who is ready to lend you a hand. To make it formal, you can have a written agreement stating the amount you intend to borrow and the terms or schedule of payment of the loan amount. This will show your intention of paying back the money and binding you and the person lending you the amount. If you prefer, you can also use collateral that will go with the loan. This will serve as a guarantee that in case you fail to repay within the time period, this collateral will cover your debt.
Apply from a credit union.
Credit unions are non-profit organizations which work similarly like banks but are different in a way that it is owned by members. You can borrow a certain amount which you will pay depending on the schedule of payment stated in the contract. Loan interests in these organizations vary so it would be best to compare several credit unions to get the best deal.
Look for a Co-signee.
Another option you can consider is to apply for a loan which requires a co-signee to get approval. Depending on the financial status and credit standing of your co-signee, you have a chance of getting loan approval since he or she will act as a guarantor of your loan. In the event that you will not be able to pay, your co-signee will be the one to carry the burden.
A bad credit history or a poor credit score rating can keep you from getting approved for a loan. This is why it is important to fix your credit history and score if you plan to apply for a loan in the future. However, when push comes to shove, these three options will work for you.