Are you not eligible for a personal Loan? Four Alternatives to Consider

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Can't Qualify for a Personal Loan? Four Options to Consider
Explore these options for securing an income gap or large expense -- and then start preparing for the next time you'll require cash.
Annie Millerbernd Lead writer Personal loans, "buy now, pay later" loans, cash advance apps Annie Millerbernd is a NerdWallet authority in personal loans. Prior to joining NerdWallet in 2019 she worked as news journalist in California and Texas as well as an expert in digital content at USAA. Annie's work has been mentioned by the press and was featured in The Associated Press, USA Today and MarketWatch. She's also been quoted in New York magazine and appeared as a guest on the NerdWallet's "Smart Money" podcast, as well as on local TV and radio. She's based within Austin, Texas.





3 October 2022


Editor: Kim Lowe Lead Assigning Editor The consumer lending Kim Lowe leads the personal loans editorial team. The editor joined NerdWallet after 15 years managing the content on MSN.com, including travel, health and food. She started her career as a writer for magazines which covered mortgage as well as the restaurant, supermarket and mortgage industries. Kim earned an undergraduate degree in journalism from the University of Iowa and a Master of Business Administration from the University of Washington.







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Personal loans offer quick, unsecure money that can be used to pay for everything from home repairs to medical emergencies. Instead of needing collateral such as the car or house, many lenders prefer those with good credit and high incomes.
But what happens if you don't meet the requirements of a lender? The people who aren't able to find alternatives to predatory, high-interest lenders. These options can be helpful in bridging an income gap, but each comes with pros and cons.
1. Consider alternatives that aren't borrowing.
See if you can come up with the money by opening up your budget and putting in additional cash, advises Tania Brown who is a certified Atlanta financial planner and financial coach. Examine your budget for expenses that you can reduce, even temporarily, like meals out or streaming services.
To save on existing bills, ask the billing company, creditors or physician's offices if they offer free interest-free installment plans She says.
Then, combine your reduced expenses with an additional job such as ridesharing or selling things you no longer require, Brown says.
2. Take a loan from a family member
If you're comfortable with asking your relative for money, that could be one of your cheapest borrowing options. It's not a requirement for a credit check or credit report, however it could require additional planning.
Bring the "game plan" that includes the loan amount, interest rate and repayment period whenever you discuss the topic to take the guesswork out of making a decision, Brown says. If you're looking for a modest loan, an informal loan document that you sign with your lender may suffice. Larger loans might require a formal agreement.
The ideal situation is for an attorney to draft a formal loan document that both of you sign, says Philip Mock, a CFP located in Tulsa, Oklahoma. There is a possibility of having to pay a fee to the attorney's services.
There could be tax implications, Mock says, so do your research when you're creating an loan agreement. For bigger loans or more complex questions ask a tax professional.
3. Split up a big purchase
A "buy now or buy after" payment plan could help ease the burden of an expensive purchase by splitting it into multiple smaller payments. BNPL plans are offered at many major stores and may help ease the financial burden of a new mattress or computer, for example.
is a simple, quick option because there's no hard credit test or lengthy process to apply, says Kristian Brennon, an accredited financial counselor based in Kansas City, Missouri.
Because BNPL providers automatically take instalments directly from the account. The agent advises making payment due date reminders and ensuring that your account won't be overdrawn.
4. Get a cash advance
Cash advance apps like Earnin and Dave give a quick infusion of up to a few hundred dollars, with no credit checks and fees that are lower as compared to payday loans. Like payday lenders, they require access to a customer's bank account to withdraw the repayment upon the next payday.
Although they are convenient, they should be used sparingly because they can be tricky to budget around, Brown says. The amount you are borrowing today will leave an opening that's the size of your next paycheck, so she suggests anticipating that gap prior to taking out.
"Make sure you're receiving exactly the amount you need and that you have a plan as to how you'll pay it for," she says.
Save money over time
Savings is the best option to pay for unexpected as well as other discretionary costs. Mock recommends having 3 to six months of expenses saved however having one hundred dollars savings can cover the majority of unexpected costs.
If you're looking for help in building your savings every month, Brennon recommends finding professional assistance from the Association for Financial Counseling and Planning Education. The organization is offering free counseling for the general public until the middle of December.
Make a list of your expenses for the year ahead such as Halloween costumes , Christmas gifts and more -- and budget for them in advance, Brown says. So, your savings can be reserved to cover unexpected expenses or gaps in income.
"Life always is going to have ups and downs, and the key is learning how to managethem," she says. "That can turn what could be a major crisis into just an annoying problem."
The piece is written by NerdWallet and first printed through The Associated Press.


About the writer Annie Millerbernd is a personal loans writer. Her work has appeared on The Associated Press and USA Today.







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