Understanding Loan Terms

Understanding Loan Terms

Four Loan Options With No Credit

by Gregory Hall

When seeking any kind of loan, you will need to provide the lender with your credit history, as it helps the lender to ensure that you will pay up. When a lender has doubts on your ability to pay back a loan, the loan will not be approved. This poses a serious problem for you if you have no credit history. This isn't the end of the line, though; there are at least four fantastic ways of getting loans without much credit. Have a look.

Credit Unions

You can visit a credit union that is owned by its own members. It usually has a less stringent loan process, a lower fee, and lower borrowing costs. In order to improve your chances, you should visit a credit union that's affiliated with your employer or your home community. You can also visit a credit union with which you have something in common. For instance, if you are a veteran of the armed forces, the Navy Federal Credit Union may process your loan faster.

Personal Connections

Borrowing money from friends and family is an age-old method of getting some cash without having to prove your worth repeatedly. If you want to assure the family member or friend that you will pay them back, you can opt for formalizing the process with clear documentation and get it legally recorded. Having a written contract with loan terms, an interest rate, and the consequences of nonpayment is a good option to build trust.

Online Options

There are many providers of loans online who can offer a loan quickly and efficiently. This is a good option for people with no credit history because credit history is just a part of the process that judges your ability to pay back any loans you take. They consider other factors, like your education and employment history, to judge your credibility. While choosing this option, it's wise to spend some time researching genuine lenders, as it will help you to stay away from scammers.

Secured Loans

This is the best way of getting a loan with no credit since it's safer for the lender and the person who is seeking a loan. In these types of loans, you can borrow the money against an asset you own, like your car, boat, home, savings, or stocks. Hard money loans are one example that allows you to take out money against a piece of real estate you own. These loans assure the lender that the money will not be a waste since the lender can sell your assets to recover the money if you seriously default on the loan. It's a good option for a loan seeker because it provides lower interest rates, access to larger amounts of money, and better terms. What's more is that if you pay it in a timely manner, your credit score will improve, which makes the future process of taking out a loan a lot easier.


About Me

Understanding Loan Terms

When I started my own company, I knew that I needed a little business capital and fast. In an effort to raise money, I worked with various lenders to discuss loans, financing, and special terms. Unfortunately, I quickly discovered that not every loan was created equally. Some loans had almost predatory terms like high interest rates and penalties, while others were completely fair. Fortunately, a business consultant of mine taught me about loans and financing, so that I could make better choices in the future. The information on this blog saved my business, and I know that it can help yours too.