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Second Chance Personal Loans With No Collateral

In this article, we discuss 4 main options for second chance personal loans without collateral.

Applying for a personal loan with collateral is pretty scary. The thought of saying goodbye to your house, car or other valuables once you fail to complete the payment on time is indeed nerve-wracking. But worry no more. Today, you can apply for a second chance personal loan without collateral through various avenues. Plus, you can use the money for anything, from debt consolidation to home improvements.

However, a no collateral loan has a catch. Because your risk of not paying is bigger, it is difficult to get one. Its requirements are more and harder than regular loans. And to know more about it, here are the types of second chance personal loans with no collateral.

 

 

Here are several bad credit personal loans without collateral options to consider:

Payday Loans

Also called payday advance or cash advances, a payday loan is a short-term loan that requires the borrower’s verified employment and payroll records. It also asks for a guarantee that the borrower will receive his next paycheck.

A payday loan usually starts with a borrower visiting a payday lending store for a small loan that is due in full, plus loan fees, at the borrower’s incoming paycheck. After submitting the requirements, the borrower issues a post-dated check in full amount, plus fees, to the lender before accepting the loan. Then, on maturity date, the borrower revisits the office to personally repay the loan.

Student Loans

A student with a medical emergency or with a money or grant arriving too late may ask for a school-related loan at his university’s financial aid office. This loan aims to assist students, who do not have collateral, in financial situations until their money or grant arrives or the emergency is over. It also aims to help students build their credit history. However, recipients should use the money wisely as the university can only lend enough and pay on time.

Loans From Family and Friends

If all else fails, borrow from a family or friend. This may be the best emergency non-collateral loan, but it can break relationships when done wrong. Usually, borrowing from a friend or family only involves a verbal agreement. There is no written contract. So if payments are not made, a serious conflict may happen. Some instances even go to court.

If you really have no choice, draft a document that states the borrower’s and lender’s responsibilities and expectations. Then, have that document signed by you (lender and borrower) and witnesses from neutral or both parties. This will serve as your written contract.

Peer To Peer Lending

In recent years, the internet has paved the way for a new type of loans, where individuals lend to each other, bypassing traditional commercial lenders. Sites like Prosper.com and Lendingclub.com allow individuals, even if they have very bad credit, to submit a listing explaining their borrowing needs. All lenders are individuals who have signed on as members of these peer to peer lending sites.

While traditional lenders, even second chance lenders, have stringent conditions on whether to grant a loan or not, people who lend money to other members of these sites have a different mindset. Even if your credit profile is really bad, if you present yourself well and explain why you are seeking a loan and how you plan to repay the lenders, you can still qualify for a personal loan without collateral.

If you have bad credit or have been turned down by lenders, these options of personal loans with no collateral can give you a much needed second chance. Take time to consider these options. You can also visit related websites and articles to get more details.

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