Having bad credit can be stressful when there's an emergency, especially when it concerns your health or your loved one's health. Some people won't even bother to apply for a loan when they realize they have a low credit score. But did you know that you can still apply for a personal loan even if you have bad credit? Yes, you've read it right.
Getting denied at a first try in applying for a loan is not the end of the world. Do not lose hope. It would be best to be knowledgeable about these kinds of circumstances so you will be able to look for solutions, particularly in applying for a loan with a bad credit history. With that in mind, here are the types of personal loans you can apply for even with bad credit history.
Secured Loans
When you have bad credit, and you want to borrow a substantial amount of cash, you can apply for Secured loans. The nature of this loan is to require the borrower to put an asset as collateral for the loan application; it will assure the lender that it's still a good investment. Hence, the loan of the borrower will be approved.
Secured loans don't require a high credit score as long as there's collateral in line. In most cases, collaterals required from the borrower are land, house, and cars. To learn more about applying for a loan even with bad credit, it would be best to visit the link below.
https://www.crediful.com/personal-loans-for-bad-credit-not-payday-loans/
Home Equity Loans
The home equity loan, also known as the second mortgage loan, is another good option to apply for when you have bad credit. You may already have an idea for companies that offer personal loans for people who have a bad credit history, but it would still be best to know the loans you can apply for when reaching out to those companies.
A home equity loan is a secured type of loan, which means collateral is a prerequisite. In this type of loan, your credit history won't matter if you'll get approved or not; your credit history would affect only the question of how much interest rate the lender will charge. Also, in most cases, the amount you can borrow would not exceed 85% of your home's appraised value.
Pawnshop Loans
One of the most common types and fastest option to borrow cash even with bad credit is a Pawnshop loan. In this type of loan, you'll have to submit something of value in exchange for the amount loaned. The pawnbroker will then review the item, and if they are interested, your loan application will be approved. To ensure you're going to pay, they'll keep the item.
Pawnshops loans are good alternatives when it comes to a small amount of loans. You don't need to have a good credit history or a credit check in this type of loan. Just a friendly reminder, though, do not forget to take and secure the pawn ticket after your loan is approved. This will serve as your receipt for the item, and it contains the terms and conditions regarding the loan.
Lastly, always repay the loan before it matures. If you don't pay the amount owed, then the pawnshop will keep your item. But pawnshops don't actually limit to loaning money, they also buy items that are of value, and of course, it will still be subject to review. With that being said, you have the option to sell the items rather than using them as collateral.
Title Loans
Title loans do not require a good credit score. They only require that you pay the amount owed within 15 - 30 days from the date of approval, and they usually imposed a higher annual percentage rate. Of course, the lender would also require you for collateral. In this type of loan, the most common collateral is your car's title or, in layman's terms, auto title loans.
In addition, you need to ensure that you can catch up with the due date since this loan has a higher APR compared to the other loans mentioned above. The amount you can borrow for title loans usually ranges between 25% to 50% of your car's value. With that said, it's still a good idea to consider applying first to the other types of loans before applying for a title loan.
Takeaway
Loans are always made to be paid. It may be difficult for some to pay their loans on time or before it matures, but at least they are trying their best. The common denominator of the types of loans mentioned above is they all require collateral. With that said, if you still value the item and want it back, you'll have to pay the amount based on the terms given.
Moreover, this article helps you know what types of loans you can apply for even with a bad credit record. With that in mind, never hesitate to ask for a second opinion from your friends and relatives upon sharing these new ideas with them. You'll never know what you truly want unless you'll hear advice from trusted people.
