For most people, when you are in need of a loan, you will go to your bank and apply for one. If your credit score isn’t great though, you will most likely be denied the loan. You don’t have time to wait for your credit score to improve, you need the money soon. If this has happened to you, and you are looking for another place to get a loan, one that will provide you with one even though your credit score isn’t great, here are a few options for you.
- Logbook Loan – With a logbook loan, you essentially use your vehicle as collateral. You borrow money against your car, using it to secure the loan. They are normally fast, giving out the money in less than a day, and you don’t have to worry about your credit rating. Because you are using something to secure the loan, the lenders don’t need to worry about what your credit score is. As long as you have an eligible vehicle, and can show that you can repay the loan on time, you should have no problem getting a logbook loan. Best of all, you get to continue driving your car while the loan is out, so your daily life is not impacted.
- Payday Loans – Payday loans are ones you need to watch out for. They are designed to be short term loans that you pay back when you receive your next pay check. Because they are over such a short period of time, are unsecured loans, and are being given out to people with poor credit ratings, the interest rates can be very high. Many people have a hard time paying these loans back, and some even need to take out another loan just to pay off the first one. If you want to get a payday loan, be sure to budget for it ahead of time so that when the time comes to repay, you will be able to afford it.
- Guarantor Loan – If you can’t use your credit score to get a loan, you can use someone else’s in what is known as a guarantor loan. With this type of loan, someone close to you (a family member usually) will “guarantee” the loan by using their credit score and signing up for it. You still receive the money and are responsible for all the payments, but if you fail to meet your repayment obligations, the responsibility will fall on the guarantor. Think long and hard about who you ask to be your guarantor, because it is a big responsibility. Also ensure that you will be able to pay the loan back on time, as you don’t want to damage your relationship with that person.
- Doorstep Loan – Lastly, there are Doorstep Loans. These loans are similar to Payday loans, but usually have slightly better interest rates and have better customer service. With a doorstep loan, you sign up online, then the money is delivered to your door. Someone from the lender then comes back to pick up the payments when they are due. These agents also have financial training, so they can discuss any problems you are having and give you advice. These loans are great if you want a personal touch with your lending experience.