Wouldn’t it be great to walk into a bank and be able to apply for any loan they offer? Unfortunately, for many Americans, this is not the case. But good-credit loans are not the only way to get financing. While these types of loans generally have lower interest rates and better terms, there are several other financial products that are willing to work with applicants with poor or fair credit history. If you find yourself in this situation, then here are five good alternatives to consider.
1. Cash advances
Cash advances, or payday loans, are short-term loans that can give you early access to the income you are about to receive. Applicants will receive funding the same day or the next business day, and then they will have until their next payday to repay the funds plus any applicable fees.
Cash advance lenders are very lenient with applicant qualifications. Generally, as long as you are 18 years or older (with a valid government ID), have proof of income and an active checking account, they’ll be willing to work with you – even if you don’t have great credit.
2. Title loans
If you’re the owner of a vehicle, then you may be able to apply to use it to secure a title loan. A title loan is where your vehicle will be used as collateral – something of value that the lender can take if you default on your loan.
Since your vehicle is collateral, the lender will be taking a lower risk. So, they’re generally more willing to work with applicants from all financial backgrounds.
3. Credit union loans
Sometimes credit unions are more lenient about applicant qualifications than banks and other conventional lenders. This is because credit unions are owned by their members and not by shareholders. So, they have more freedom to set their own rules and standards.
4. Pawn shop loans
A pawn shop loan is a loan that lets you exchange one of your assets for a short-term loan (generally for cash). The collateral is generally something that can be easily resold, such as a TV, jewelry, and artwork. The borrower will then have approximately 30 days to repay the loan or risk losing ownership of the asset to the pawn shop.
These types of loans are widely used because they require no credit check whatsoever. That means that almost anyone can borrow cash from a pawnshop.
5. Borrow from your family or friends
When all else fails, you can always turn to your family and friends for help. They may be happy to give you financial assistance, but if you do exercise this option, make every effort possible to repay your loan. Defaulting on the loan could cause both financial and personal problems between your family and friends. Whenever possible, don’t let money damage these relationships.
The bottom line
If you’re having trouble qualifying for a good-credit loan, there are other providers you can turn to. Cash advance and title loan lenders regularly work with applicants who have less than perfect credit. Credit unions are also more lenient than banks about applicant qualifications. And when all else fails, you could always turn to pawn shop loans or borrow from family and friends. Both of these options require no credit check whatsoever.
