Your second option is to apply online. Search for secured loan providers who also accept applications from individuals with a bad credit. You need to be aware that the interest rate charged will be much higher than the standard rates which are on a regular loan. This is because you are a high-risk borrower, and lenders have to charge interest to compensate for that risk.
Secured bad credit loans require a property or asset as collateral. Assets that can be used for collateral are stocks, house, yacht and vehicle. But if you choose to use the stock as collateral, it's essential to liquidate it first. Lenders can repossess the collateral if payments are not made on time.
Peer-to-Peer is a form of borrowing and lending between individuals, or 'peers', without a traditional financial institution such as a bank or building society being involved. If you want to borrow money, the peer to peer websites matches you up with people willing to lend it to you.
Although they do emphasize on a good credit score, there are some platforms who can allow you to receive a capped loan even with a bad credit.
The individual investors may have their own ways of determining whether you can afford to repay the loans. Certain things you can do on some lending platforms is posting on their forums how much you need to borrow on several P2P loan sites.
Investors that are interested will bid the amount they want to borrow on the listing. It generally takes one day – 2 weeks for the funds to be released after the loan is approved.
People with bad credit can also tap into their home equity to get a loan. Home equity loan allows you to borrow against the amount that you have paid off in your house mortgage. In-home equity loans, you use your home as collateral. The advantage of this type of loan is that it has a lower interest rate and the interest charges are tax-deductible. When your home equity loan is approved, you will receive a lump sum cash.
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