Low income, high risk loan lenders are out there in a number of different places and from multiple providers. Youll find they have some serious drawbacks that youll need to consider before you take out the promissory note, so you dont waste your money. In this article, Id like to go over some of those considerations, as well as some of the places to go when you need to borrow money.
Before You Borrow Alternatives
Have you really looked at all your options and alternatives to high risk loans? Even if youre very low income, you might have some better alternatives to taking out another promissory note and borrowing money at high rates of interest.
Raise Capital/Funds: You might have some unwanted items around your house right now that you can unload and sell quickly to come up with enough money to avoid taking out another loan and putting yourself further in debt.
Debt Prioritizing: Is there a way to free up some funds each month, which would allow you to avoid taking out another loan from a high risk lender. Look into the difference between secured debt and unsecured debt and make an informed decision.
Borrowing From Family: Think about this one carefully. Many families have been torn apart from failure to pay off a debt. Money should not come between you and your family or friends, but it could be a great place to look for low interest rates.
Before You Borrow Considerations
These are some additional things you must keep in mind before you take out the high risk loan, especially if you are a low income applicant. The banks will look at these things as well.
Employment History: Even if youre a low income family, if you have and maintain steady employment, theres a better chance of getting approved when you look to borrow money from a lending institution.
Income History: This is different than your employment history, although it can be related. Is your annual income trending upward or downward? What are your sources of income? If you get government benefits, child support, or other forms of income, you might have an easier time to qualify.
Payment History: Whats your credit score? While payment history is only part of the equation, its one of the most important parts. Get all accounts current if they are not, and make sure you dont have any accounts in collections.
Collateral: If you have collateral, you are more likely to be able to get a secured personal loan, even if you are low income. This minimizes risk for the bank, so they are more likely to approve your application for you.
Debt to Income Ratio: Banks look at your debt to income ratio and determine how likely you are to avoid default if you take out another loan. Decrease you debt and increase your income.
Where to Look
There are some places that you can look for a high risk, low income personal loan. Listed below are some options that can be either lump sum payments or monthly installments.
Pawn Shops: You put up an item as collateral and borrow money, with monthly interest rates do. These are short term personal loans with high interest, but they are an option to consider if you have very bad credit, since there are no credit checks.
Banks: If you have a good credit score, perhaps over 650, a bank loan is an option. Those over 700, even if they are low income applicants, should have fewer issues with getting approved.
Online Lending Institutions: Youll find some that claim guaranteed approval, but they generally dont deliver and they charge obscene rates of interest. It is an option to keep in mind.
Car Title: Personal loan regardless of credit history can be secured through car title lenders. The interest rates are ridiculous, sometimes topping 300% APR, but it will work in a pinch.
There are plenty of low income, high risk loan lenders to consider.