7 Alternatives to Offering Secured Loans

If you are experiencing a financial emergency or you just need some extra cash to complete a home project then you have a number of options for getting the money.

But you might be thinking that there are fewer options for you because you have nothing to use as collateral to secure the loan or maybe you have had some credit issues in the past.

These are definitely factors in getting a loan and the terms of the loan but they are not issues that will eliminate your ability to get a loan. There are many unsecured loan types that you can choose from and you just need to find the one that best meets your needs.

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Peer to Peer

This is a newer type of lending and it operated exclusively online. The platform works as a portal to connect investors and borrowers. Lenders can invest small or large amounts and can defray the risk by diversifying their account to encompass many different loans. The biggest advantage for the investors is that this type of investing is currently providing around a 10% return on investment which is very good in the current market. Borrowers like the system because of the simplicity of working online as well as the fact that the approval process considers more than just a credit score. Most platforms consider current debt to income ratio and career experience as well as financial history when determining approval for a loan request.

Bank Signature Loan

If you have a strong or long term relationship with your bank then that is a good place to start looking for a loan. Often times you can get a loan based on your debt to income ratio and your work history. The terms of the loan will be determined by the dollar amount of the loan as well as your credit but you can expect a repayment time frame of 12 to 60 months. In addition the interest rate that the bank charges could be much less than some alternative lenders and the payments that you make will help you to establish payment history to improve your credit score whereas payments to other lending entities might not.

Cash Call

This is a web based lender who offers loans ranging from $2,600 to $25,000. The terms of the loan are strictly based on your credit but that means that the better your credit is the lower your interest rate will be. You can apply online, via fax or even with a phone call and have your loan processed very quickly. In some cases the money can even be wire transferred into your account in as little as four hours.

Check into Cash

This is a very fast payday type loan that can be the solution to needing money very quickly. It can be that resource that gets you to your next paycheck or helps you pay for an unexpected car repair or medical bill. You can apply online or in a store location and get the money that you need the same day and there are no credit checks. The downside to this loan is that they are normally only offered at up to $1,000 and the interest rate can be fairly high. But if you have bad credit and need cash quickly then this is a solution for you.

Crowd Funding

Almost everyone has heard of the businesses who got their start by using a crowdfunding site like Kickstarter or Indiegogo. These sites allow you to raise funds for more than just a business startup and even better is that you don’t have to pay the money back. So you never need to worry about high interest, a short repayment period or a credit check. What you do need to consider is that there is a fee charged by the site where you set up the account and there are no guarantees that you will get funding. You need to convince guests to the site that you are worthy of a donation and that can be harder than you might think. Finally, it can take a long time to get noticed and get donations made to your fund if you get any at all.

Debt Consolidation

If you are carrying a lot of debt and have high-interest rates on most of it, then you could feel like you will never get the debts paid off. Using debt consolidation allows you to combine all of your debt into one manageable payment at a reasonable interest rate. You might need to pay a few transfer fees but with much lower interest you will still be able to pay more principal each month and make progress paying down your debt.

Installment Loans

Under the terms of this loan, you agree to make monthly payments on the amount that you borrowed. The fees and interest are figured into the payments. These loans are typically longer term than a payday loan and can range from a few hundred dollars to several thousand. Some lenders even offer up to $35,000. These loans are available to borrowers with low incomes and a wide array of lenders offer these unsecured loan types. The only real drawback could be the interest rate and the fees but it is an option if you are in need of a loan.

Pick What Works For You

The best part about choosing to get a personal loan is that you are free to use the money for whatever project or debt that you choose unlike a loan on a car or home which requires the money be used for that single object. In addition, getting any of these unsecured loan types is a fast way to get the much-needed cash in your hands or in your bank account quickly. This is a competitive market and that greatly works in your favor, lenders are competing to get your business and they want to offer you great terms and a fast answer on your application. So don’t be afraid to seek a personal loan when you need some extra money even if you don’t have perfect credit you have many options to choose from.

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