You Have Options

When you are applying for a loan, whether it is secured or unsecured—it might be nice to know that there are options available for you even if you do not have the best credit or job history.

If you know that your credit is less than stellar, you might think about getting a secured loan. A secured loan is when you put your house (or sometimes your car or savings account) up as collateral on the loan. Banks are more inclined to give secured loans because they have a higher success rate when it comes to repayment. After all, you don’t want to lose your house do you? Another nice thing about secured loans is that you can often stretch out your repayment plan for a longer period of time.

You might want to try for a “bad credit” loan. These are loans that are given with higher interest rates than regular secured or unsecured loans. The interest rate is raised so that the lender can be sure that, even in the event that you default on the loan, they will have recouped their investment as much as they possibly could. Bad credit loans are often harder to get as most lenders are hesitant to give them out.

You could also try to find somebody to cosign the loan. A loan cosigner is also looked on favorably by most lenders (provided your cosigner is credit worthy) as they will be given a contingency plan in the event that you cannot re-pay your loan. Of course, finding a willing cosigner might prove to be problematic for older borrowers. The cosigner is, of course, just as responsible for the repayment of the loan as you are—they are the ones who will be billed if you can’t pay the loan back and their credit will be dinged just as much as yours if the loan falls into default status.

Your chances of getting a loan are higher than you might think—don’t think that just because your credit history is poor or because you are unemployed that you will not qualify for a loan. Make sure, though, that you shop around—do not take the first loan that is presented to you. The chances are high that you will be able to find a loan that suits your needs and at a rate that is more than favorable.