Are You a Good Candidate for Alternative Credit
If you need money fast that you may not otherwise be able to get from a lender, you should consider an alternative credit loan. This will open up many options for you as you seek the financing that you or your business requires.
The first thing to understand is what alternative credit is and how it may help you. Nontraditional credit is something that people will turn to when they are either shut out of the credit market or will not be able to borrow money for the specific purpose for which they want the money. These are loans with greater speed and a less invasive approval process.
They Work Best for Weaker Credit Borrowers
Credit alternatives work best for people who do not have the strongest credit. Traditional lenders may shy away from them because they are not the most creditworthy borrowers. However, even people with poor credit histories still need to borrow money for things such as cars and mortgages. The credit alternatives market still allows them to get the money that they need to make large purchases.
This could include people who have filed for bankruptcy in the past. Ordinary credit lenders would shy away from lending to people with a bankruptcy on their record for up to seven years. They may even find themselves completely shut out of the credit market in its entirety. In order to get any credit at all after a bankruptcy filing, you would need to rebuild your credit first.
You do not even need bankruptcy to be denied credit. All you need is one or two missed payments and your credit score will suffer. Even if your credit is good, the economy may cause lenders to be more conservative with their lending.
They Can Get You Money in a Hurry
Moreover, this type of credit also works best for people who need their money in a hurry. For example, if you have a possible business opportunity for which you need quick financing, such as purchasing a property in an auction, you may not have the time to wait for a bank to approve your loan. Applying for a traditional loan takes time, and by the time you have your approval, you may have missed out on the opportunity.
Another example where this type of financing can be helpful is if you are a home flipper. Here, you need to have financing in place either when you bid for a property or very shortly thereafter. Any delays can cause you to miss out on the property. If you are in a similar business situation, alternate credit products are fitting because of the speed that they offer.
There Is Little to No Credit Check Required
One of the major benefits of this type of credit is that there is rarely any type of credit check required. In other words, you can receive this loan with a minimum of documentation. If you do not have your documentation in order but still need a loan, this type of credit may be right for you. Many lenders will not ask you for things such as tax returns, pay stubs, and other proof of income. They may not even ask for any proof of assets.
You may also be a good candidate for alternative types of credit if you do not have a credit history and are trying to build one. When you establish a track record of making regular payments on your loan, this shows up in the reports that other prospective lenders see. However, you always need that first loan in order to begin to show that you are creditworthy. Almost no traditional lender wants to be the one to take a risk on you like the first one to advance your credit. Thus, you may need this product in order to begin to build your credit.
The great thing about this type of credit is that lenders have different criteria than do traditional ones. This makes loans easier to obtain than they otherwise would. These criteria de-emphasize the importance of credit history. Ordinarily, credit history would be up to 35% of your credit score, depending on the scoring model that is being used.
They Offer a Variety of Options
Another thing that makes alternate credit products a fitting option for you is the fact that you have a variety of different options available to you. In other words, there is no one-size-fits-all product that counts as a credit alternative product. We will work with you to find the right type of product that works for you and your particular situation. The right option can depend on a number of things, including your current business status. Different products can include varying repayment options based on the duration of the loan. This is truly meant to give you a flexible way to obtain credit.
The Interest Rates Are Lower than Payday Loans
All of this will come at an interest rate that is lower than payday loans. You do not need to risk your financial future to obtain the credit that you need. One way to help lower your interest rate is to collateralize your loan. The fact that it is backed up with property will mean that lenders will feel more comfortable working with you. Most traditional lenders are not interested in making collateralized loans.
With alternative credit, you can get quick approval. Moreover, there is a higher chance that the lender will say yes to your application. There are fewer hoops to jump through than a traditional loan meaning that you can have the money that you need when you need it.