Often, many of us get stuck into different turmoil of life, which result in a bad outcome. These problems may caused by certain uncontrollable circumstances. A bad credit is somehow the same situation. Mainly and most of us score badly due to forceful circumstances not by any deliberate attempt. Further, it is very hard to get any financial support in form of loans from banks. But, the game is not over, there are still few ways available through which one could access financial support.
- Credit unions
A credit union is a financial cooperative similar to banks, but is owned and run by their members. Credit unions differ from banks and other financial institutions as they are nonprofit institutions. In case of bad credit, these credit unions are more likely to be beneficial for you. These institutions look the borrower personally and loan themselves money based on character and promise to repay, instead of credit score and other numbers on the loan application. One should look for related credit unions for more chances of getting loan.
- Ask from Family & Friends
At the times of most difficulty, family and close friends are the one who turn around for help. Basically, if you have a really bad credit score, this is the only left option. Your acquaintances can afford to take chances as they know you. But, one should never treat this service lightly, getting a loan from family should dealt as an important business transaction, otherwise it can become poisonous for your relationship. It is suggested to do the agreement on paper, diminishing any chance of hassle in the future.
- Peer to Peer
This form of lending is also known as person to person lending, which is relatively a new loan form. Instead of borrowing from banks one could get it from individuals. Borrower can apply loan online on different p2p sites, further lender decide whom to give loans. Credit score is also considered, but an individual lender looks the overall terms. Interest rates are usually lower in P2p as compared to banks.
- Secured loans
If your credit is not sufficient for banks and credit unions, the best chance to get money is through secured loans using collateral. The lender will hold something for value like car, home, shares etc. The amount of loan sanctioned is equal to the amount of asset you put in. Generally, these loans charge less interest and timely repayment can eventually increase your credit score.
For those who are willing to get loans from their relative banks like SBI loans, PNB, HDFC bank personal loans on a bad credit score, might end up on losing side. Instead they should go for the above mentioned lending option, for successful venture.