If you have a less than perfect credit history, you might think it will be impossible for you to secure a loan. Don't despair! Here are three possible options that might get you back on the road.
Credit unions are similar in the way that they work to your usual bank, except that you must be a member of the credit union if you want to avail yourself of their services. Credit unions have national and local branches.
Although credit unions operate in a similar way, their membership requirements may vary. For example, a union in a certain city might require that you work for a particular local employer, or that you live within the city boundaries. Many unions simply ask that you make a small one-off donation to one of the credit union's chosen charities.
Unlike large, anonymous banks, credit unions offer a more personalised service to their members and can be more forgiving of those with a poor credit history. The interest rate you receive on a small loan will also generally be very competitive too, saving you money.
Use a guarantor
Many lenders who won't consider you for a loan because of your poor credit history will accept your application if it is guaranteed by a family member or friend whose credit history is good.
The loan is taken out in joint names, although you will make the repayments from your own bank account. The payment history will be reported on both parties' credit reports. Provided payments are made in full and on-time for the duration of the loan, both of your credit scores will increase. However, if you default, the lender will come after both parties for repayment of the debt.
Peer-to-peer loans, also known as P2P lending, entails borrowing money via an online platform from an individual, rather than from a financial institution.
Applicants set up a profile on the P2P website within which they post a loan listing. Within this listing, you give details of the amount you want to borrow and state the purpose of the loan. Investors on the site then consider the loan applications registered and may lend you the money you want, even if you have a poor credit score. Interest rates offered by P2P lenders are often very competitive.
It may be possible for you to secure a loan, even if you have a poor credit history. Check out the options above, and have a chat with a good financial advisor for more information and advice.Share