Loans

It’s a fact of life – at some point we need money for big purchases or emergency expenses, and we might not have it all in our back pocket. 

That’s where loans come in: you borrow money from a lender, you pay it back over time, and you give the lender a little more (interest) for the service.

How to get a loan

Different lenders have different levels of ‘strictness’ when lending people money. 

If you want a personal loan from the bank for example, you’d usually need good credit, an income or some sort of asset to act as collateral (more on that later).

If you don’t have a bank account

One of the basic requirements when getting a loan is for you to have a bank account. But what if you don’t have one? 

There are other types of loans for people with no bank accounts, but you’ll have to pay more interest.

These loans are also often short-term loans. Which may not be suitable if you’re looking for things like a mortgage. 


If you have bad credit

Most lenders require a good credit score to grant a loan, but some companies also cater to people with bad credit. 

Sure, it’s not an easy process and you might be hit with higher interest rates.

One of the things you can do is to provide a large down payment to offset your bad credit

Because the lender is giving you a smaller loan, your chances of success are higher. 


If you have no income

Your income is a crucial factor in getting approved. Lenders require you to provide proof that you’re earning money, so that they know that you can pay back your loan.

This doesn’t necessarily have to be a job. The income can be from investments, a business or an inheritance. 

What if you don’t have an income? Some resort to lying about their income on their loan application, which is a big no-no. You’ll face serious consequences, such as jail time.

One way to get around this is to have a guarantor, or co-signer on your loans. This person must have a source of income. 


Using collateral to improve your chances of approval

You have better chances of getting approved for a loan if you can offer collateral. 

It’s an assurance for the lenders that if you default on your loan payments, they can still seize your asset to recoup their losses.

Cars and houses are the most common types of collateral. But you can also use more ‘off-the-wall’ assets such as your annuity as collateral.


Borrow from family and friends as an alternative

When you need fast cash and borrowing from a bank is out of the question, one option you can turn to is borrowing from the people you know.

It’s easier said than done, though. You can’t simply ask them to lend you money. There’s a proper way of asking and things to consider when asking friends or family for a loan.


How to avoid loan scams

One of the first things to do when getting a loan is the legitimacy of the loan company.

Loan scams have become more common in the age of the internet. You can use our checklist to identify a loan scam and check if a loan company is legitimate.

Student loan tips

Student loans are commonly used to afford the tuition costs in college. You have plenty of options, including federal and private student loan providers. Check out our review of the best student loan servicers.

What credit score do you need for a student loan? 

If you’re applying for a federal student loan, you don’t need a credit score. But if you’re applying for a private loan, you should have at least a 670 FICO score.

As a student though, you may have a thin credit file or no credit history at all. What should you do then? Read more about credit scores for student loans


Using a cosigner to get approval

Many students use a cosigner to help them get approved more easily. However, there are also ways to get a student loan without a cosigner and even with bad credit.

If you go down the cosigner route, you can get your cosigner off of the student loan. You’d typically do this when you can afford to take on the loan yourself. 

Mortgages

Owning a home is a dream for many Americans, and getting a mortgage is a key step to realizing that dream. 

The FHA loan for First Time Homebuyers 

When buying a home, most people turn to mortgage loans for funds. One of the best options you have is a Federal Housing Association (FHA) loan. 

One advantage of the FHA loan is that you can apply for it even if you just started a new job.

The FHA loan is not for everyone though. Read about the disadvantages of an FHA loan before you get one.


Protecting your credit when shopping for a mortgage 

While it is important to shop for the best mortgage rate, doing that could trigger a hard inquiry on your credit report, lowering your credit score. 

Here’s a guide on what to do when shopping for a mortgage so that you don’t hurt your credit.


Lowering your mortgage repayments 

After paying your mortgage for a while, you might want to explore options to lower your monthly repayments. 

There are many ways to do this, such as a loan modification. This is where your lender will change the terms of your mortgage agreement so that you pay less repayments each month. 

You could also refinance your mortgage at a lower rate and extend your loan tenor. While the loan modification and refinancing achieve the same result, there are some differences between them.

If you’re cash rich, you could do a partial repayment so that you owe the bank less. 

One little known way to lower your mortgage repayments though, is to use a homestead exemption.


Getting a mortgage without a social security number

You might not have a social security number if you’re a non-citizen. This can make it hard to get a mortgage traditionally. 

Luckily, you can find lenders that use ITIN (Individual Taxpayer Identification Number) when approving a mortgage loan.


Transferring your mortgage

You may be able to transfer your mortgage to someone else if you plan to sell your house.


Conditional loan approval

While researching a mortgage, you might have come across a concept called conditional loan approval.

It’s when you’ve already submitted the requirements and gone through the initial process, but the lender may need additional documents or conditions you need to meet.

Home Equity Loans & Line of Credit

So you’ve been paying down your loan for years, and built up quite a bit of equity in your home.  

If you have an unexpected need for cash you can take out a home equity loan.These are loans you can take against your home equity, which means you’re putting the value of your home as collateral.

Alternatively, if you just need a line of credit handy but don’t have an immediate cash need, then you should get a home equity line of credit (HELOC) loan.   

Auto Loans

An auto loan funds your car purchase if you can’t buy one in cash. If you have good credit standing and a job, you’re likely to get approved for an auto loan easily.

But what if you’re still a student? You can still get a car loan as a college student, but you’ll have to get creative to meet the borrower requirements.

Similarly, you can also get an auto loan with no credit or proof of income, if you get a cosigner.

The same rules apply to motorcycle loans as well. Read our guide on applying for a motorcycle loan with bad credit.

Meanwhile, if you want to transfer an existing auto loan to someone else (for example, when you sell your car), you can do so.


Credit Union Loans

If you’re a member of a credit union, you can take a loan against your savings. It’s called a share secured loan, where you can borrow money and use your savings as collateral.


VA Loans

If you’re a military veteran, an active member, or a spouse of one, then you probably qualify for a VA loan. 

It’s a mortgage loan guaranteed by the US Department of Veteran Affairs and is just one of the loans you can get from the army.

You can also use a VA loan to buy a manufactured home as long as it meets VA requirements.

A child can’t use a parent’s VA loan. However, you can transfer a VA home loan to another person, which essentially includes your children.


Personal Loans

A personal loan is a loan that you can get for any need. Usually these are meant to be short term loans to cover an immediate need. For example, you can take out a personal loan if you need help paying rent

Personal loans typically have high-interest rates because they’re unsecured loans, which means there’s no collateral involved.

You can get a personal loan if you’re unemployed. The catch is that you must have other proof of income, such as unemployment benefits, pension, or public assistance.


Payday Loans

Another way to get cash quickly is to use Payday Loans, which is meant to cover any expenses between your paydays. They have fast approval and you can get the funds in a day or two.

Even with bad credit, you can still get approved. There are payday loans with no credit check. You only have to provide proof of income to show that you can pay back what you owe.

Payday Loans are often accused of predatory lending, which is where they hit you with very high fees if you can’t pay them back in time. So you should only resort to these loans as a last resort. 


Reviews of Loan Providers

If you’re looking for the best loan providers for your needs, check out some of our reviews: