Those with bad credit have always had a hard time securing any type of loan from traditional financial institutions. Particularly in the current sour economic climate, trying to get an unsecured loan from a bank, especially for those with bad credit, is a nearly impossible task. It is therefore important to focus on a different means for acquiring such loans: private lenders.
But who are private lenders? How does one locate a reputable private lender? The answers to these questions follow and by learning the ins and outs of this method of acquiring a loan, you will be on the path to getting the money you need in no time.
Who Are Private Lenders?
The term private lender seems formal and in some senses it can be, however it can also refer to someone as familiar as a parent or close friend. Looking towards close contacts as a means to get money quickly when you need it is a really great option if it is there. By using family members or friends as loan sources, you are able to get money without a credit check and may not need to abide by many conditions after taking it. The amount of interest you pay may be little to none and often you will not need to return the money until you are financially able, eliminating the need to borrow money to pay back borrowed money.
If you are not comfortable with this option, or if it is not available to you, there are still other sources to which you can turn. Sometimes what is known as peer-to-peer lending, where one asks work friends to help out, can be an option. In this case a contract can be drawn and terms can be applied that will make the experience batter.
The final option is to turn to the internet. Online there are a host of options that are much different from those of traditional banks. There is a huge demand in the loan industry today, so as a result many lenders are out there and willing to compete for your business, despite your credit score. This does not mean that anyone can get a loan, it simply means that the discrimination you have experienced in banks will not be present. If you have a good job with steady income you can qualify for an unsecured loan. However, the lack of collateral involved in an unsecured loan means that your interest rate will be higher than if you get a secured loan instead.
How to Find Them
If you opt to use a lender that you locate online, doing a background check on the company and the agent is really important. Otherwise, you leave yourself open to scam artists. A quick way to find good lenders is through lending agencies or clubs. This represents a third party who can screen potential lenders for you. Lending agencies serve as your representative in the loan process and will help to negotiate interest rate, repayment and other terms that will suite your needs. One way to make sure that either the lender or agency that you ultimately choose is a good one is to check them through the Better Business Bureau.
If you have bad credit for any reason, it is really hard to get back on your feet and into a position where you feel like you can borrow money once again. However, there are options available for you when banks keep saying no. Make sure that you know and research these options and you can get a loan.
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