Everyone at some point or the other may be in need of large amounts of cash, whether to buy a car, a house or any other expenses. This may require the person to take a loan to fulfill the requirement. However, before taking up a loan, one should ensure that they have a financial capability to repay the loan. If a person does not have a good saving habit then going for a loan can be bad idea as it could push him further into debt. If one is unemployed or not in a steady job their repayment capabilities could also be considered suspect. Therefore, the best way to check if you have the ability to repay the loan is to have a look at your credit history.
One must remember that when they take up a loan, they will have to make some changes to their lifestyle so they can cope with the added expense of the monthly repayments. This will require them reduce some excesses. In some cases if the credit history of an individual is not the best, then a credit impaired loan can be approved and one of the following options can help you to get a loan.
- Auto Loans
In case you are in the need of some money and do not have very good credit, an auto loan is one of the ways to get some money. You can hold a previously paid off car as collateral depending on its value and it can be paid off at a reasonable rate of interest.
- Home Equity/Mortgage Loans
If you have a home that has been paid off, then using it as collateral will be one of the best ways to get another loan through a mortgage. To avoid extra spending due to higher interest rates, one should save a large sum of money for down payment and then refinance the rest of the amount as soon as possible. Mortgaging a house can be a good way to get a credit impaired loan.
- Private Loans
Private loans are one of the best options for people who do not have a good credit score. These loans are difficult to get, but by looking to your relatives, they can provide you with a loan even with your poor credit history. This could be a good option as the loan will help you to take care of all payments and you can pay it back in a way that will be convenient for you and your lender.
- Personal Loans
Personal loans are also not the easiest to secure as they also function the same like signature loans, which are not given to individuals who have a possibility of high risk. Thus to improve your eligibility, you can add a co-signer to your application whose income can be added to yours. This can be a partner, spouse, relative or a close friend.
To learn more about how to go about a credit impaired loan you can consult a professional finance broker