If you have neither good credit or a lot of money in your bank account, you may think it impossible to get anyone to give you a loan. While borrowing money with poor or no credit is not ideal, there are loan options available. What are some ways that individuals with little or no credit can do to get the funds that they need in a timely manner?
Look to Your Peers for Help
A peer-to-peer loan may make it easier to put money in your bank account within 24 hours of requesting the loan. Peer loans are made by individual investors who are looking to help out ordinary people in their time of need. You will make monthly payments to those investors over three or five years at a reasonable interest rate.
Borrow From Your 401K
If you have sufficient funds in your 401K, you may be able to borrow against it at an interest rate much lower than what you would get from a bank. You may payments on a weekly, monthly or quarterly basis depending on the terms of your loan documents. Interest rates can be as low as 3 or 4 percent, and each payment plus interest goes right back into your retirement fund. You are essentially paying yourself back instead of a lender, which may make it easier to write that check every month or quarter.
Get a Personal Loan
Personal loans are available for those who have good credit and for those with limited credit. You can get such loans either from local lenders or online lenders, and you will get your money within hours deposited into a bank account of your choosing. The money can be used for any purpose such as paying taxes or taking a vacation.
Ask Friends or Family for Money
While this may not be the most ideal situation, your friends or family members may be willing to give you money with flexible repayment terms. However, be careful that you can repay the money as promised. Otherwise, the loan could work to strain relationships with those who you love or care about. At the very least, you should secure the loan with collateral or make some other show of good faith before asking to borrow the money.
When your choice is to go into debt or not have a place to live or a car to drive, most people would choose to go into debt. If you have limited access to funds, getting creative may help you find the loan that you need at an affordable interest rate and reasonable repayment terms.