Best Types of Loans

Best bad credit loans

It’s ironic how people who need loans most cannot easily get it. If you have bad credit, you know how tough it is to get a financial institution to lend you the money that you need. You might think it’s hopeless to apply for loans when you need to pay for emergency medical bills or car repair. However, you can get an approval if you apply for personal loans for people with bad credit.

If you have been denied a loan before, just know that there is hope. Here are three of the best types of loans to apply for if you have bad credit.

Home Equity Line of Credit

This type of personal loans for people with bad credit requires for you to own a home with equity. You have a better chance of getting an approval with flexibility on how to use your funds as well as adjustable rates. It is also cheaper than credit cards.

However, home equity line of credit is risky in the sense that you can lose your home in the event that you failed to pay for the loan. You also have to pay a closing cost and use your house as collateral. The bank also has the final say if they want to close your line of credit.

Credit Union

Compared banks, it is much easier to get an approval with credit unions. Their standards are often more relaxed than banks as well. With some credit unions, anyone can join. Eligibility can be based on residence and employment, which is quite easy if you are in the right place at the right time.

However, this loan limits how much you borrow as it is based on your credit score. Given that your score is not so good when you apply for personal loans for people with bad credit, then you cannot borrow much. The loan period is shorter as well.

Cosigned Loans

If you have a friend or family member who is willing to cosign for a loan, then you get a good deal. Although cheaper and much more flexible, this loan puts someone else’s credit score in danger. At the same time, it may take time to get someone to cosign with you as it is quite risky.

These three options show that despite having bad credit, you still have the choice and the resources to get you back on your feet.