Who says that you must have good credit to get a loan? It’s simply not true! With the economy being what it is and the credit market still being tight people with poor credit still need access to money at good rates.
Let’s look at a few ways that you can borrow money at great rates even with poor credit…
Idea #1- Get the IRS to give you a six month interest free loan!
As a former CPA I understand that the IRS views your taxes withheld from your paycheck as if they were withheld evenly through the year. So what the big deal you ask? Let’s say I’m having $400/mo withheld and I normally still get a small tax refund.
What should I do if I need money like… now! Well for the first 6 months of the year have $0-$200 withheld then for the last 6 months pay yourself back. If I decide to have only $150 instead of $400/mo withheld the last 6 months I would need to have $400 plus $250 to have the same taxes results. Think about it, it makes a lot of sense plus there are some other creativity ways to do this.
Idea #2- Get a loan from your Stock Broker
Your Stock Broker wants to help you in your time of need. How? Let’s say you have about $3,000 in your Brokerage account (Stocks, Bonds and Mutual Funds). Without a job or credit check the Broker will loan you up to $3,000 while using the Investments as collateral. This is called a Margin loan. The rates are less than 10%, but beware, if the value of the investments decline you will have to repay a portion of the loan sooner… this is called a Margin Call.
Idea #3- Borrow it from yourself
Three possible solutions exist here; first borrow from your 401k loan with great rates and no credit check. If you have an existing loan, let’s say $3,000 balance that keeps you from tapping more of the $50,000 401k balance use one of the others to pay-off the smaller loan to get to the big money. Beware, if you leave your job or your job leaves you this loan has to be paid off to avoid a taxable transaction.
Second, do you have an IRA account that you believe you can’t touch without paying taxes? Solution- Tax laws allow you to withdraw from your IRA once every 12 months for up to 60 days without any tax consequences. Thirdly, if you have a Self-Directed IRA, when properly structured you can make loans with another individual without tax consequences.
Your tax professional may understand this concept if they don’t give me a shout out.
Be on the lookout for the next post for more money!!!
William V. Thompson is a Financial Strategist and co-owner of the Affiliate Marketing Company, Dynamic Financial Training. These ideas are from his E-book “The Money Interviewer”.
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You can e-mail William at cssc@mydft.com or call 336.272.7373
THX that’s a great asnwer!
Thanks! Stay tuned for more great content… For any specific questions/issues you may have feel free to e-mail us at cssc@mydft.com or give us a call at 336.272.7373.
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