Today brings a sponsored guest post from comparethemarket.com
Having poor credit can severely limit your options when it comes to getting a loan. So, what do you do if you find yourself in that position, but still need to borrow?
Find Loans Geared Toward You
There are lenders out there who do give loans to those with less-than-perfect credit – and at the same time allow you to improve your credit rating as you borrow. The interest rates might be high, but you are assured of getting an approval from these lenders. Credit building credit cards could be just what you need to bring your credit score up to what you would like it to be. Do a quick search online to find lenders that cater for this market – if you’re sensible it’s a good way to rebuild your credit rating.
Securing your loan with collateral can make a bank think twice about denying you. Collateral can reduce the risk the bank takes when issuing you a loan. A secured credit card uses a security deposit to reduce risk in the event of non-payment. This option will make it easier to get a loan should your credit score be right on the borderline of what lenders are looking for. This is a high-risk strategy though and only to be used if you are sure you will repay the loan on time.
Get A Cosigner
Putting another signature on the loan can make it a lot easier for a bank to approve your loan. The cosigner will vouch for you in the event that your credit score isn’t good enough to get a loan. Student loans commonly require a cosigner for approval. For everyone’s peace of mind, the individual who cosigns on the loan should be ready and wiling to make the payments if need be, before signing the loan.
Put More Cash On The Table
A large down-payment can be good enough to get you a loan. Lowering the amount that you need financed can make it easier to get a loan – and will save you money in the long-run too. It’s all about reducing the risk that a lender has to take on you. You might not qualify for as much as you want, but lowering the amount of money that you need from the bank will make them think harder about approving you.
Getting a loan when you have poor credit can be a difficult journey. However, there are many ways that you can improve your chances. Just make sure that you are aware of these options before you assume that there is no chance of ever getting that loan.