If there is one fact of life that no one can escape it’s that credit scores count when it comes time to borrow money. Credit scores are based on impersonal ratings system that doesn’t take into account a person’s character, whether or not they experienced unusual circumstances when making choices that hurt their score.
Credit scores are like taxes in that there is no real shot at being a part of society and being able to avoid having a score. If you have a great credit score and apply for a loan then lending institutions will make it rain dollars faster than an NFL player in a gentlemen’s lounge.
For those people with low credit scores applying for a loan from a bank will feel like a trip through the Sahara desert in August.
Fortunately for people with less than perfect credit scores when it comes to borrowing money banks aren’t the only game in town in fact bank loans only account for twenty five percent of most funding options. Since the banks are only a fraction of the total lending options you can be sure there are a number of choices available that your banker doesn’t want to talk about.
Here are five top choices for securing a loan with less than perfect credit.
1. Credit Cards
One of the best options for funding are credit card programs specifically designed for people with low credit scores. Lenders generally charge a much higher interest rate to compensate for taking a risk on low credit score individuals but the fact of the matter is these cards will report back to the credit agencies and if used responsibly will go a long way toward repairing a credit rating.
2. Equity Loans
If you have a degree of equity in a home or a piece of property you can always put up the property or home as security for a line of credit. There are a number of sub prime lenders with varying rates for this type of venture so you’ll want to shop around before deciding if this type of loan is right for you.
3. The World of Web Based Micro Lenders
There are a number of person to person web based lending systems available on the web that offer small loans to people with poor credit. Oftentimes people can secure loans anywhere from two thousand up to twenty five thousand dollars even with less than perfect credit. These types of loans will also build your credit rating since they report to the credit bureaus. You’ll want to look at a number of lending sites inside of this fairly new type of lending system since each one offers a different method for calculating the price of the loan as well as the repayment method.
4. PayDay Instant Loans
If you’re cash needs are urgent or if you prefer to keep the amount of your loan low and the process of obtaining the loan simple then a PayDay Instant loan might be the right choice. Using a smartphone, the web or the phone book chances are if you have a steady job and a checking account you can secure an instant loan in as little as a few hours. The process is fairly simple with minimal paperwork to fill out. PayDay Loans are pretty much what they say they are which is a short term loan meant to get you through to the next check which is when most of them are due.
5. Auto Title Loans
Title loans are short term loans available for people with less than perfect credit who own a car and are willing to use the car as collateral for a short term loan. The benefit of the loan is that the person uses the car as collateral and still has full use of the vehicle during the loan period. Typically repayment periods for Auto Title Loans are one month.