When you have less than perfect credit or even poor credit it can seem near to impossible to get a personal loan. The banks and lending institutions are wary of any investment that holds risk to them with regards to the ability to pay back their loan.
When this is the case, you may be left with very few options. Those options can often come with high interest payments and inflated loan projections that can not be worth the effort. You may have tried to get a personal loan at your regular bank, from family and friends or from a P2P organization without any success but that doesn’t mean that you are out of options.
A secured collateral personal loan is a way to get a loan by putting forward something valuable that you own as a guarantee of repayment. If you are a risky investment for institutions, they will be more apt to consider a loan if you have some collateral to secure your payments. Take a look at some of the things that you can use as collateral to secure a personal loan today.
Home or Property
If you own a home, even if it still has a mortgage owing on it you may be able to get a loan equal to the amount of equity that has collected on your house. This is the most common type of collateral loan. You may also consider a home equity loan or a second mortgage on your home which are similar solutions. Be careful to make sure that you are not overborrowing. You will need to have a reasonable repayment plan in place before accepting your loan. If you default on any of your payments, you could end up seeing your home or property go into foreclosure.
Future Income
In some cases, banks and other lending institutions will secure a personal loan based on your future paychecks. This is different from a payday loan that is often backed by private companies that are well known to use manipulative tactics in their lending practices. A future income loan through your bank is only a short term agreement. You will be expected to pay back your loan quickly with your next available paycheck.
Investment Portfolio
Brokerage and investments firms are often willing to give out personal loans against your stock portfolio. These are known as securities based loans. You will often be able to borrow the equivalent of your portfolio with a variety of repayment options available. The downside is that the markets are always fluctuating and if you happen to take a hit on any of your investments, you will be required to make up the difference to your lender immediately.
Car Equity Loans
A car equity loan is not the same as a car title loan. With a car equity loan you may be able to secure a loan for the Kelly Blue Book value of your car to be repaid in scheduled installments. A car title loan gives the lender the right to take over your car if any repayment is missed. For most car owners, this type of loan may secure you a needed amount of money but only up to the amount that your car is valued at. So, for anyone needing to borrow a larger amount this may not be enough to meet your needs.
