Ways of getting a loan with low credit include using collateral, peer-to-peer lending and credit unions, according to About.com. Other ways include getting a cosigner and submitting relevant information regarding the borrower’s income, notes SFGate.
A person with low credit can try borrowing from individuals in peer-to-peer lending instead of banks, as individuals can be more sympathetic, and banks come with higher overhead costs and rigid rules and conditions, details About.com. The borrower can also get a cosigner, who should have a sufficient financial cushion and be a relative or close friend. This action can also help the borrower to obtain better terms, although the cosigner remains accountable for the loan should the borrower default, cautions SFGate.
Additionally, since a person can have low credit from a one-time incident, such as divorce, death or job loss, it is important to submit all relevant information regarding financial status when borrowing. The information may include recent pay stubs, tax returns and the summary of assets, liabilities, income and expenses. This information, as well as evidence of new recovery after the incident, such as getting a new job and acquiring valuable assets, can increase chances of loan approval, advises SFGate. Other options for increasing the odds of acceptance include offering collateral to show commitment and offer the lender a measure of security, explains About.com.