Different Types of Loans You Can Take With Bad Credit!
As you consider a personal loan, you will come across two types of loan options. These include unsecured and secured loans. But, if your credit history is poor, the lender will think twice about approving the loan request.
So, you can check out the different kinds of loans you can take even when your credit score is not quite high. If you get in touch with a Slick Cash loan, you can explore options for no credit check loans.
Unsecured and secured personal loans
As you think about taking a personal loan through a traditional approach, it can either be a secured or an unsecured loan. For a secured loan, you have to provide an asset to secure the loan. The lender can possess the asset if you fail to pay off the loan within a certain period.
On the other hand, if you opt for an unsecured loan, it doesn’t require any collateral. These loans don’t need collateral so they can be risky to the lender. Hence, when the lender is about to approve the personal loan, he will insist on making repayments with a high-interest rate.
Student Loans
If you’re considering a loan to pay educational expenses, you must consider a student loan. The individual can take a federal student loan even when such loans require a good credit score.
Moreover, the repayment terms are quite flexible when you take a federal student loan. You will not have to worry much about anything, even when you choose a suitable repayment plan.
Auto Loans
When you pledge a car as security for the loan, then this loan is known as an auto loan. If you fail to make repayments on time, the lender will possess the vehicle. Furthermore, the qualification requirements for an auto loan differ with every lender. But, if you want to be eligible for the auto loan, then your credit score should not be less than 670.
Conversely, you should also meet certain requirements related to debt-to-income (DTI) if the credit score is less. In that case, you also need to make a large down payment before you take the auto loan.
Payday Loans
Most of the time, people take payday loans when they have to cover some expenses quickly. But, when you take such type of loan, you can repay the amount as soon as you get your paycheck. Besides, many lenders don’t bother to check your credit history before approving the loan.
They will only want you to present some important documents, so they know your capability to pay off the loan. Apart from this, you must explore many other options before considering a payday loan. If your friends can’t offer a sum of money, then taking a payday loan can be the last option.
Home Equity Loans
If you have sufficient equity, the property’s market value minus the mortgage balance can help you get a home equity loan. While you plan to borrow money against your house, the lender will consider the property as collateral. It implies that if you fail to repay the loan, the lender has every right to own the house.
However, if you opt for a home equity line of credit, you can use only a certain portion of the funds when needed. In such a case, your credit score must not be below 600. You also need to have a score of anywhere between 600 and 620.
Read More: Everything You Must Know About Bad Credit Personal Loans
Summary
There are many types of loans that you can take with a poor credit score. If you think about taking a secured loan, you must pledge an asset as security for the loan.
On the contrary, the lender will not bother checking the credit history when considering a payday loan. But, when you think about a home equity loan, the lender will consider owning the property only when you fail to pay off the loan.
Pranab Bhandari is an Editor of the Financial Blog “Financebuzz”. Apart from writing informative financial articles for his blog, he is a regular contributor to many national and international publications namely Tweak Your Biz, Growth Rocks ETC.
