5 Most Popular Loan Types for Poor Credit and Bankruptcy
If you have poor credit, it can be very difficult to get approved for any type of loan, credit card, or even a phone plan or apartment. If you have filed for bankruptcy, it can seem nearly impossible to do any of these things.
So how are you supposed to get back on your feet if no one will give you a chance?
Fortunately, there are many loan options available even to those who have bad credit or have filed for bankruptcy. Here are five of the most popular options:
Payday loans are a well-known option for getting money, fast, despite what your credit report has on it. Typically, you only need to show some old pay stubs to get a payday loan. You get an advance on your check, and you are expected to pay it back with interest.
While payday loans can be easy to get, they can also be very difficult to pay back. They come with astronomical interest rates that make it difficult for you to ever put a dent in the principal. Many unethical lenders are also in the business, so it’s easy to get drawn into a relationship with a con artist if you aren’t careful.
Peer-to-peer lending works through a third-party intermediary, usually. You go to a website, and you put in the amount you need. The site puts out your request to lenders, and you get offers. Some may come from individuals, and some may come from small businesses. The individuals are typically investors who are loaning the money for the return it offers.
Just like with payday loans, there are risks to peer-to-peer lending, including that you can get wrapped up with an unethical lender or that you can get nearly impossible terms. Always do your research and review any offers thoroughly before accepting.
You can do more at a pawn shop than just buy items for a lower cost. You can take valuables that you own to a pawn shop to get a pawn loan. Depending on the pawn shop, you may be able to pawn jewelry, electronics, guns, or even your car. You get a loan based on the value of your items, and you have to pay the loan back in 30 to 90 days, typically.
The downside to a pawn loan is that you have to hand over your items for safekeeping while you are paying back the loan. You may not want to be without your wedding ring or your car, for example. Also, the facility may not be secure enough, and you could end up losing your valuables through no fault of your own.
Secured Credit Card
You may not be able to get approved for a credit card if you have credit issues, but you should be able to get a secured credit card. You put a certain amount of money into a savings or checking account, and the card is issued with a limit that matches that deposit.
So actually, you aren’t getting a true loan with a secured credit card. But it can be a way to get what you need without spending your own money off the top. The bank is more willing to extend you this credit because it knows that it can seize the money in your account if you don’t pay.
Auto Title Loan
If you own your own vehicle, you can tap into its value with an auto title loan in Nevada. Vehicle title loans are typically available for cars, trucks, SUVs, and RVs. You can get a lot more money than many of these other loan types offer you, and you don’t have to give up your vehicle to get it. You keep driving your vehicle while you are paying back the loan.