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Can You Get a Loan With a Low Credit Score?

Can You Get a Loan With a Low Credit Score?

If you don’t have the best credit but need cash, don’t worry. You can get a loan with a low credit score. Many lenders are willing to look beyond your credit and consider other factors, like your assets, income, and employment situation. As you shop around for loans, you’ll find two options: secured loans and unsecured loans. So what is a secured loan and what is an unsecured loan? Since both types of loans are available to borrowers with less-than-perfect credit scores, let’s go over how they work.

Secured Loans

Secured loans are secured to collateral, which is an asset you own. This might be your house, car, stocks, bonds, jewelry, or fine art. While secured loans offer large borrowing amounts and lower interest rates, they can be risky.


Here’s why: If you fail to make your payments on a secured loan, the lender may take your asset. If you depend on your asset, like your car, on a regular basis, for example, this can be problematic. Several of the most common types of secured loans include:


  • Secured Personal Loans: While secured personal loans are less common than unsecured personal loans, these products do exist. Most lenders who offer them are flexible with the types of collateral you can use. But again, they will seize it if you fail to make your payments.
  • Home Equity Line of Credit (HELOC): A HELOC lets you borrow money using your home equity as collateral. Your home equity is the difference between the value of your home and what you owe on your mortgage. With a HELOC, you can withdraw as much or as little as you’d like, up to a set credit limit. You’ll only pay interest on the amount you borrow. A HELOC puts your home on the line.
  • Car Loans: A car loan is designed to help you pay for a new or used car. You can get one through a bank, credit union, online lender, or dealership. If you default on a car loan, the lender may repossess your vehicle.


Unsecured Loans

Unsecured loans are the opposite of secured loans because they don’t involve any collateral. If you choose an unsecured loan, you won’t have to risk losing any of your assets. When you apply for an unsecured loan, a lender will consider factors like your credit score, income, and employment status.


Rest assured that you can get approved for an unsecured loan, even if you don’t have the best credit. Many lenders have lenient criteria and are open to lending to all types of borrowers. Here are the most popular types of unsecured loans.


  • Unsecured Personal Loans: Unsecured personal loans are widely available and can be used to cover a variety of expenses, from home improvement projects to car repairs and anything in between. In most cases, these products offer easy online applications and fast funding.
  • Credit Cards: Credit cards can be a great way to pay for day-to-day expenses. Depending on the card you choose, you may earn great rewards, like cash back, travel points, and gift cards. Plus you won’t pay interest if you repay your balance in full every month.
  • Student Loans: Student loans are designed for a variety of education costs, like tuition, room and board, books, and supplies. Federal student loans are backed by the government while private student loans are given by private lenders.
  • Home Improvement Loans: Home improvement loans are exactly what they sound like: loans that are specifically intended for home improvement projects, like kitchen remodels, deck additions, and paint jobs.

The Bottom Line

Fortunately, loans for low credit are out there. You can choose from secured loans that require collateral and unsecured loans that do not. Best of luck in your search for the perfect loan!

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