Personal loan is the most common type of loan that provides you with assistance to cover your individual expenses. A personal loan can either be secured or unsecured, based on the purpose of acquisition. For instance, auto and home loans are type of personal credits that are secured through substantial purchases. On the other hand, American Express cards or Payday Loans lender Uncle Buck is an unsecured type of personal loan that delivers fast cash on easy conditions.
Banks usually require a good credit record to approve a personal finance, especially the secured one. However, not everyone is lucky enough to have a strong credit history. But that doesn’t mean you cannot obtain an advance. Here are some tips to get a personal loan without having a good credit history.
Search Banks that Accept Weak or No Credit History
It is true that all banks demand a good credit record for quick disbursement of loans. It is also correct that most of the banks don’t even consider the application of borrowers without a credit history. But not all institutions follow the same policy. Search online to locate the banks that accept weak or no credit history. You would find numerous financial institutions with lenient set of requirements, where you can easily qualify for a personal loan. However in such condition, you will make greater down payment and be charged higher interest rate.
Go for Private Local Lenders
Apart from traditional banks, you can also take assistance from private lenders. Find locally to know some good and reputable money lenders in your town. Discover the people around yourself who have taken the services of a private lender. Ask them about their experience, based on which, you can make a good decision. However here again, private local lenders usually charge a significantly higher interest rate.
Find a Guarantor who Takes Responsibility of your Loan Payments
You can also seek help from any of your friends or relatives, who are willing to assure you timely repayments. However, almost every bank has its own qualification criteria for guarantors or cosigners. The person who pledges on your trustworthiness must have a good repute of his own, which is mainly based on his credit history. Once the loan is provided, always make regular, on-time payments, as this will affect the solvency of your guarantor.
Use Peer-to-peer Lending
This method is usually recommended for young graduates, who want to take a good professional start. This is a type of financing where two unrelated individuals or peers enter in to a lending agreement. It is to be noted that no financial intermediary is involved in such kind of lending. The borrower gets financial assistance and in return pays a specified amount of surplus on principal amount.
Start Building your Credit History
Although the above described solutions to find a personal loan without credit history are quite effective, these are not always recommended by the experts. Therefore, it is advised to start building your own credit record and maintain a good credit history.