The controversial COVID-19 pandemic has been an important topic all around the world. It has been affecting businesses and workforce numbers on a significant scale, especially for people and small shops that rely on continuous profit to keep themselves afloat.
Overall, this is nothing but an unfortunate situation we are in and a heavy burden on our everyday living. However, many are losing jobs and have been turning to loans for survival. While people with outstanding credit scores can obtain easy loans, there are still some options available for people seeking loans with bad credit.
In this article, we will discuss loan alternatives you may consider getting an application, especially for people having bad credit scores as of today, here are some other options.
Secured Loans
Generally speaking, regardless of how low your credit score is, you can always raise your approval chance by providing an asset to be used as collateral to the lender. Collateral can come from your private properties or business stocks. Getting a guarantee is always a good option considering the issues we are having.
Business owners could opt to take stock loans as an option, using your stocks as collateral. Equipment such as assembly lines or the company vehicle are also great alternatives. This could give the lender an assurance that after the outbreak, you can keep up with the monthly installments made and increase your chance of approval.
If you are running a business, this could be an excellent option to cover your losses and pay your employees as you prepare for a decrease in workforce employees.
Homeowners can also opt for collateral loans, such as auto loans or home equity loans. If you’re a homeowner who was laid off from the job because of the outbreak, then using a piece of your property, such as the family car, could save you for a few extra months doing supply runs for your family.
On the other hand, filing for home loans secures a considerable amount of credit to be paid in the longer-term. This loan has its risks because your home becomes the collateral.
Fortunately, it comes with two programs for your flexibility. These are home equity loans and Home Equity Lines Of Credit (HELOC). Home equity loans, refer to loan applications to a large sum of money to be loaned and paid off in monthly installments.
Home Equity Lines Of Credit or HELOCs, on the other hand, is a credit line application that you can loan off numerous times under a specified limit then paying the balance for a longer-term.
In short, a home equity loan is an installment plan for getting a considerable sum of money, while HELOCs are loans that act as a credit card in nature. Bear in mind these loans come with collateral, so make sure you can pay the amount under the contract agreement to avoid your assets being repossessed.
Unsecured Loan
Setting up unsecured personal loans is another option if you don’t want to utilize collateral for loan approvals. While unsecured loans are considered risky for lenders and traditional banks, there are alternative options you can take in case lenders would not offer unsecured loans due to the nature of the outbreak.
One option is taking a look at online loan websites. Looking for unsecured loans has reached online and can be easily accessed through your computers. This is highly recommended with individuals looking for fast and cheap quick loan.
Online loan websites work the same as traditional bank institutions; they offer loans with almost-instant approval rates and come with non-collateral contracts. But since this is still an unsecured loan in nature, they collect stricter payment schedules and have higher interest rates. They also offer limited loan amounts, especially for first-time borrowers.
Another option you can look online is a peer-to-peer service. Peer to peer lender service hosts a marketplace for multiple private lenders. These lenders come from different lending services and offer a wide range of loan amounts, as well as their interest rates and contract details. You can sign up and look for deals beneficial to your financial standing.
Do bear in mind that any offer that bears no collateral agreement would always have higher interest and stricter repayment rules. Also, be wary of predatory loans that will leave you deep in debt.
Still, if you need to get a quick cash grab, these are the best options you have that wouldn’t require you to approach a physical bank.
Takeaway
The recent outbreak has made our day to day lives more difficult. As our financial health is in trouble, we still have loans to keep ourselves afloat a little longer. With countless options, some applications are in favor of you. Take time to select these alternatives with proper consideration. Be realistic and make sure risks are manageable, and payment can be made on time.