Most people think non-traditional loans are only for those with bad credit. This avenue is helpful to individuals who do not qualify for a bank or credit union loan doe to credit problems in the past. It is also helpful to people with no credit history.
The strange element of credit is that if an individual has never needed a loan before, it is difficult to get that first one to build up a credit score. Someone who scrimped and saved to pay cash for a car, for example, may not be eligible to get a traditional loan for car repairs. No credit score can be as limiting as a bad credit score.
Ways to Remedy That Situation
Getting a cosigner for a traditional loan is one way to build credit. The only problem with this solution is it can be difficult to find someone willing to take on that responsibility. The cosigner guarantees the loan will be paid, so if payments are not made by the primary person, the cosigner must repay the loan. This is typically a family member with a high credit score. Many people do not want to risk a high credit score on behalf of someone else.
A Non-Traditional Loan
A non-traditional loan can also help build credit. The minimum requirements are few and easy to meet. The person applying for the loan must be at least eighteen years of age. A verifiable income source deposited into an active checking account is essential.
The total amount of take-home pay needs to meet the minimum set by the lender. The only other requirement is no involvement in a bankruptcy case. Those interested can fill out an application online and wait for approval, which will take anywhere from a few hours to twenty-four hours. Once the loan is approved, it can be deposited into the checking account, or picked up at one of many lender locations.
Read Terms Carefully
Before signing a loan agreement, be sure to read the terms and conditions. If there is something not understood, ask questions. Reputable lenders, such as Maxlend Loans, will discuss all the fees, interest rates, and payments prior to asking for a signature.