What Types of Loans do You Qualify for with Bad Credit?

Saturday, June 23, 2018, 6:00 AM | Leave Comment

Bad credit can really mess one up especially when you could really use the money. One gets into this mess most likely because they fell into hard economic times. These are the people who need the money even more, but financial institutions don’t work like that.

Luckily, having a bad credit score does not spell the end of your being eligible for a loan. There are types of loans that you qualify for. In any case, you can work to make your credit score better by reducing your debts and making loan payments on time.

A cursory search online for something like DCL secured loans for bad credit might give you a whole list of loans that you can opt for if you need money fast. Forget about who turned you down the last time you tried to get some credit.

The following list gives you the types of loans you can target for now.

1. Home Equity Line of Credit (HELOC)

   If your home has equity, you can get a loan on it. You should be sure about your ability to pay off your loan this time because you stand to lose your home if you fail. You are putting your home up as collateral.

   You can get a tax-deductible loan at a fair interest rate and without expenditure restrictions. However, find out the limitations on claiming your loan as a tax deduction.

   Pros

   • You are not limited in how you use your money.

   • The interest rates may be lower than those of credit cards.

   • The rates are adjustable as Home Equity Line of Credit rates are usually lower.

   Cons

   • There are closing costs.

   • Your home is collateral.

   • You must use the funds immediately or face charges.

2. Bad Credit Loans

   Not many people would want to be caught up in bad credit situations. However, if you find yourself on the list of bad credit scores, you might find that the only loan you qualify for is the Bad Credit Loan. Only take this route if you must. The interest rates for this one are headed towards the skies.

   Pros

   • You qualify for this one even with bad credit.

   • You can get pre-approved for this loan.

   Cons

   • The interest rates are too high.

   • The limit exists on how much you can borrow.

3. Peer-to-peer loans

   This one is relatively new, but quite reliable. Your loan comes from a peer lending site. These are websites that enable you to get a loan from an individual lender instead of borrowing from financial institutions. The loans are not secured, but the sites have requirements.

   Pros

   • It is easier to get than one from an institution.

   • Interest rates are lower than credit cards.

   • The fees are fewer.

   • You can explain to your lender why you have bad credit.

   Cons

   • The rates can be quite high.

   • The qualifications for borrowing are quite strict.

   • You may have to wait up to two weeks to access the funds.

There are sites like DCL secured loans for bad credit that can give you more information on other loans that you qualify for other than the three discussed here, but it is a relief to know that you can still access funding even with a bad credit score.

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