You may have come across a sign or an advert of loans for people with bad credit. As you probably know, getting long term loans with bad credit or no credit is very difficult. When you have poor credit, you are considered a risky customer to credit unions, lending institutions, and banks. This is because lenders have set strict standards to acquire loans.
When you have bad credit, you may think that you can only get loans from payday lenders. These are lenders that give you money at high interest rates. Unfortunately, these companies leave you in deeper debt than before. You should note that in some regions, payday loans are illegal.
Signs of bad credit
To know the way credit can affect your loan acquiring options. You need to know your credit score. Nowadays, there are several websites that can help you get your credit score free of charge. It is estimated that over 70% of the people do not know their credit scores. The following are signs of bad credit.
- You pay high interest rates than normal ones advertised
- Having a history of late payments of your bills such as utilities and housing
- You over withdraw your checking account on a routine basis
Visit credit unions
Credit unions are just like banks as far as their services are concerned. However, they are owned by individual members instead of profit-seeking shareholders. Usually, they are nonprofit organizations. It is advisable to seek loans from credit unions that are community-based.
Borrow from friends or family
You ought to be cautious when borrowing from a friend or a close relative. This is because when you fail to repay the loan, you poison the relationship in a manner that is worse than a poor credit report. In any case, people who are close to you are you great sources of funds. For instance, a family loan is bound to benefit every person involved. Thus, you should formalize it with appropriate documentation.
Get a co-signer
If you find it is not possible to borrow from a relative or a friend, you can approach another person who can trust your capacity to repay back. You can request the person to be your co-signer on loan from a reputable lender.
Online personal loans
Technology has widened a gap and has opened personal loan lenders. In fact, this is a new industry for persons with bad credit scores.