If you have bad credit, you may not think that you can get a loan. The good news is that there are many lenders that are willing to give you the money that you need to pay bills, pay taxes or start a business. Let’s take a look at the secured loan options that may be available to you in the event that you have poor or no credit.
Secured Credit Cards May Be Available
A secured credit card is like an unsecured credit card in many ways. You are given a credit line and are responsible for making payments each month to your lender. However, unlike a traditional credit card, a secured line of credit requires an initial deposit. In most cases, the size of your deposit determines how much credit you are entitled to.
Some lenders will deduct some of your deposit to pay account or other fees associated with the card. If you make timely payments over 12 to 24 months, the secured line of credit may be converted to an unsecured line of credit, which would entitle you to your deposit back with interest.
Loans Using Assets as Collateral May Help You
If you own your vehicle, a title lender may be willing to let you borrow against its value. Typically, title loans are repaid in 30 days, but it may be possible to find a lender that is willing to let you repay the loan over the course of several months. Interest rates for a title loan are generally lower than those charged by payday lenders because of the secured nature of the loan.
Those who own their homes may be able to apply for a home equity loan or line of credit. While most lenders only make such loans to individuals who have good credit, it may be possible to qualify if you make a lot of money or have a low debt-to-income ratio. Interest rates are around 5 percent depending on the lender, the amount of the loan and how long you need to repay it.
Secured Personal Loans Are Offered By Many Lenders
A secured personal loan can help you get the cash that you need in a reasonable amount of time. Online lenders may be able to get the loan proceeds into your bank account by the next business day. Most banks will approve and fund your loan request within three to four business days. Loan amounts may range from $500 to $50,000 depending on your needs and your ability to provide sufficient collateral.
Personal loans can be secured with many different types of collateral. In addition to putting up the title to your car or the deed to your home, it may be possible to secure a loan using shares of stock or other assets that can be liquidated quickly. Adding a cosigner to the loan may give the bank sufficient assurance that it will get its money back without having to put up an asset to secure the loan.
Just because you have a poor credit score or lack a credit history doesn’t mean that you can’t get a lender to work with you. As long as you have collateral, it may be possible to get hundreds or thousands of dollars quickly and for use in any way that you see fit.