If your credit has ever been really bad, or if it is now, then you know how hard it is to get any kind of credit. Even worse, you’re so convinced that you can’t get credit that you don’t even try, but there are options, even for those of us with really bad credit.
- Payday Loans: Payday loans are probably the most expensive type of loan that you can get. The interest rates are typically significantly higher than traditional loans, and you must repay them on the due date (your next scheduled payday) or there will be steep fees added to the account. That said, there are times when you absolutely have to have the money right now, and as such, a payday loan can be a life saver.
- High Interest Rate Loans: There are loan companies that will work with you, but beware of the interest rate that you may be charged, pay attention to any fees, and make sure you can actually make the payments before you sign on the dotted line.
- Title Loan: If you own your vehicle outright, a title loan can be a less expensive loan option, especially if your credit is less than perfect. Interest rates on title loans tend to be lower than unsecured loans. In exchange for the cash that you need, the loan company will place a lien on your vehicle while you make the required payments. Once the loan is paid off, the lien is released.
- Home Equity Line of Credit: If you own your home, and you have some equity in the home, then you may be able to borrow against the equity that you have in your home, but be sure that you can make the payments on this loan, as you are taking a big risk with this type of loan.
- Borrow Against Your Retirement Account: Again, this is not a favorable option because of early withdrawal penalties and tax repercussions associated with borrowing against your retirement account. However, in the event that you do have to borrow against your retirement, make certain that you opt for a loan and not a straight distribution from your account.
- Cosigners and Relatives: Although this is the least favorable option, you can approach a relative to either loan you the money that you need or cosign along with you on the loan. However, the cosigner’s credit will likely be affected by the joint loan and they are held responsible in the event that you don’t make the payments, so if at all possible, I would avoid this option.
As you can see, you do have loan options, even with really bad credit – the main thing is to be certain that you choose wisely, and once you’ve made your choice, that you pay the loan back as soon as possible!