People make mistakes, and sometimes they make mistakes with money. Overspending, too many debts, and other financial problems lead to bad credit scores, which in turn prevents one from taking a loan.
Luckily, there are a few ways to borrow money even with a bad credit history. Below are four of them.
Credit unions are member-owned cooperatives that provide savings, credit, and other financial services to their members. Unlike banks, credit unions are nonprofit organizations that share a common bond among multiple savers and borrowers. Being a credit union member requires one to become a partial owner and participate in the union’s profitability — it’s hard work but the advantages are enormous in times of emergency, says PrimaryResidentialMortgage.com.
Federal Housing Loans
Offered by various mortgage companies, the Federal Housing Authority’s Choice Loan was designed to assist borrowers with bad credit histories. An FHA Choice Loan allows individuals to finance a home even with a low down payment. This kind of loan is ideal for people that wish to own a home even with a credit score lower than 640.
Also known as P2P lending, Peer-to-Peer loan is an online platform that allows individuals to borrow directly from another person instead of from a bank or organization. This kind of lending works by posting a loan listing and waiting for a lender to answer the request. The practice has been growing in popularity due to the low-interest rates that allow investors to earn and progress swiftly.
Home Equity Line of Credit
Individuals who have enough property equity can get a low-interest, tax-deductible line of credit to spend for a new vehicle, higher education, or even a family vacation. This kind of lending puts a person’s property in jeopardy, which is why it is important to have a reliable source of income and a disciplined way of paying debts.
Taking a loan is okay, but one must be responsible for it. Pay your debts on time and don’t borrow money if you don’t have the income to cover it. Financial responsibility goes a long way.