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Articles » Low Credit Score Loans | | What Are The Different Types Of Loans That You Can Get With A Low Credit Score? |
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Low Credit Score Loans generally fall into four major categories. They are Home Loans, Auto Loans, Student Loans and Personal Loans. Each of these has a different criteria and different threshold for acceptable credit scores. These range from 620 to 700, depending on the lending institution and your personal payment history. Another factor that will be taken into account is the amount of open credit lines you have out, which normally directly affects your credit score.
Home loans, or mortgage loans, are difficult to get even with good credit, but low credit score home loans are available with some assistance. The Department of Housing and Urban Development (HUD) offers FHA loans to those who are qualified by the Federal Housing Administration. These mortgage loans usually require a lower down payment of 3% and are guaranteed to the lender by HUD.
Student loans are also difficult to get if you have a low credit score, but there is help available through FAFSA, the Free Application for Federal Student Aid. Filling out this form could make you eligible for a Perkins Loan, a Pell Grant, or other assistance that is available through the federal government. There are also consolidation loans available for those with low credit scores that you can use to pay off existing loans and apply for more credit to continue your education.
Auto loans are the type of low credit loan that is probably most available to those even with the lowest of credit scores. Automobile sales people will do absolutely anything to get you the financing that you need to buy a car. After all, they work on commission, so getting you a loan puts money in their pocket. If the traditional finance methods through the banks or manufacturers are not available, they will go through finance companies such as AmeriCredit that specialize in low credit auto loans.
Personal loans are the trickiest of the four. Personal loans are not applied for with a specific purchase in mind that can be repossessed on non-payment, such as a house or a car. Banks will generally offer a secured loan, but with a low credit score it is almost impossible to get an unsecured loan. Credit Unions are a little easier to work with, but you will also need to have an account with funds in it to negotiate a personal loan.
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