Do you need to take out a loan, but fear you won’t qualify if you don’t have collateral? While having a house, car, or some other asset to offer up when applying for a loan increases your chances of approval, when you don’t have these things, there are other things you could try. Though this will limit the amount you can borrow and the lenders who are willing to make an offer to you, you can still get your hands on some quick cash without too much hassle. Check out these suggestions below.
Apply for an Online Cash Advance
If you don’t have any assets worth using to apply for a loan you can check on where to apply for a cash advance online. There are lenders who are willing to entrust you with a certain amount of cash despite your inability to produce collateral in exchange. Cash advances are short-term installment loans which can be used for any purpose. Depending on the lender you choose to apply with, you could receive several hundred dollars within a business day in your qualifying checking account.
To be eligible for a cash advance, typically, you need to be 18 years old, have a job (income must meet lender’s minimum standards), and have a checking account in good standing. You can apply online and receive a decision in minutes. If approved, you can get the funds in just 24 hours. As installment loans offer flexible repayment options, you can break the balance due into small monthly payments easy to keep up with your budget.
Prove Your Ability to Pay
If you need a high-balance loan, but you’re hoping to obtain one without collateral, you’re going to need to prove to the lender that you can repay the loan in full. You can try and further prove your ability to pay by showing things like how long you’ve been employed with the same company, how much you have in savings, and other forms of income you have that you can contribute to repaying the loan such as spousal support, a business, or a part-time job.
Have Someone Cosign
Another option for getting approved for a personal loan without collateral would be to have someone who does have collateral (or good credit) to apply with you. Lenders review cosigner’s financial background just as they do the borrower, but may be more reluctant to approve an application if there are two people promising to repay the loan on time as opposed to one. If you choose this option, however, you are strongly advised to repay the loan on time because you will most certainly ruin the credit of the person who tried to help you out.
Show Good Financial Behavior
If you’ve been diligent in improving your credit, but still aren’t quite at a point where lenders would readily give you cash, you can try showing good financial behavior on your own. List all of your outstanding debts and ask each creditor to give you a statement or record of payment over the past few months (at least 3-6 months of timely payments). If you’ve been paying on time, the record will reflect this and you can try showing it to a lender to see if they’d be willing to approve your application despite the current status of your credit history and score.
When you need to borrow money and you don’t have any collateral, you’ll need to take a few extra steps in order to prove your creditworthiness. If applying for a cash advance or short-term loan does not produce the amount of money you need, then your best bet would be to use the above-mentioned options to try and show lenders you can be responsible. Once approved, it will be up to you to make good on your promise and repay, or else you’ll end up making it more difficult to get funds in the future. If you can’t get approved, simply work on building your credit and look for other opportunities to make quick cash that don’t require a good credit score or collateral.