Top ways you can raise money when you have bad credit

Your option of outsourcing cash can be limited even more when your credit score is poor. Most lenders assume that your score is a reflection of your finances. It is for this reason that they will view you as a too great risk to bring on board and thus turn their backs on you. This can be a very bitter pill to swallow especially when you need urgent cash to fix an emergency. However, if you are smart, you will not have to struggle as there are few choices that will guarantee you approval. Here is a list of the top options you should consider.

Take out a tenant guarantor loan

A tenant guarantor loan is a type of lending that allows you to pick a guarantor who is not a homeowner. This way, you can easily ask your best friend to vouch for you even if he/she is a tenant. What’s more your credit record will not be a hindrance. However, since your co-signer is standing in for you, then they must have a perfect credit score. Remember, your guarantor is enough leverage as your lender will have something to fall back in the unfortunate case where you cannot keep up with payments. It is to your benefit to select a guarantor with whom you share a close relationship characterized by mutual trust.

Logbook loan

When you have credit issues but you own a car, opting for a logbook loan is a smart move to make. This is because, logbook lenders will not take your credit history as a do or die eligibility requirement. What they will need most is your V5 document that proves you are the legal owner of the vehicle you want to use against the loan. The good thing about this type of lending is that you still get to keep your vehicle and use it for your normal daily routine. However, if you fail to make repayments, the lender can repossess your car. So, avoid borrowing more than you need but most importantly ensure you can afford to comfortably pay it back.

Borrow friends or relatives

Sometimes opting for a loan from a bank or other official lending alternatives may not be a smart move to make. This is because you could end up making your credit score worse if you fail to pay back on time and as agreed. This is why you should avoid the high penalties you will pay by opting to ask your friend or close relative for a loan. And since they understand your financial situation quite well, they might be more lenient on the terms and conditions you both agree on.