What Are Unconventional Personal Loans?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Typical Requirements for Unconventional Loans
‘Fair’ Credit Score or Higher
Steady Source of Income
Pension Social Security Disability Shareholder income Commission Alimony Child support Rental property income Hourly wages Trust funds
Low Debt-to-Income Ratio
Alimony Child support Mortgage/ rent Student loans Auto loans Credit card—use the monthly minimum payment amount Personal loans
How Do Unconventional Personal Loans Work?
Traditional vs Non-Traditional Lenders
Pros and Cons of Unconventional Personal Loans
Reasons to Consider an Unconventional Loan
Don’t need a high credit score to be eligible May not need to secure the loan with collateral Loan funds are often received very quickly Borrowers may be able to help build their credit history and improve their credit score
Types of Unconventional Loans
FHA loans: these loans allow you to buy a house with a very low down payment VA home loans: these loans are for military personnel to buy a home with no down payment USDA loans: for people with low or moderate income to purchase a home in a designated rural area and require no down payment HUD Section 148 loans: designed for Native Americans, these loans have no minimum credit score limit
3 Personal Loan Tips
Shopping around helps ensure that you’re getting the best deal you can. Lantern by SoFi makes this easy. With one online application, you can find and compare personal loan offers from multiple lenders. If the interest rates you’re being offered seem too high, try lowering the loan amount. Generally, the larger the loan, the greater the risk for lenders, who likely charge a higher interest rate for the increased risk level. Don’t assume that if you have bad credit, you can’t get a personal loan. There are lenders who specialize in bad credit loans.
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