Loans Personal Loans

8 Unconventional Loans That Can Bail You Out of a Tight Spot

Here are some ways to access cash fast when you have been denied by traditional lenders.

clerk at bank office
Updated Oct. 4, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Traditional loans aren’t the best option for everyone. If you need to make money moves to access cash fast, unconventional lending options are worth looking into.

Here are some options that can bail you out of a tight spot. However, as with nearly everything, there are pros and cons to each. So, it’s important to do your research before making a decision.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Peer-to-peer lending

Bigc Studio/Adobe Loan application form with pen

Peer-to-peer lending is different from taking out a loan from the bank. With this type of lending, a third party will connect you to potential investors.

These investors often charge lower interest rates than a bank would. However, borrowers might need to answer more questions than they would if they were applying for a traditional loan.

Home equity line of credit

Iryna/Adobe excited man reading job application

A home equity line of credit (HELOC) allows you to tap the home equity you have built up as a homeowner. Unlike with a home equity loan, you borrow only what you need. You can continue borrowing throughout your draw period, which is typically five to 10 years.

However, taking out a HELOC is not without risks. Defaulting on a home equity line of credit can damage your credit score. Even worse, it can potentially cause you to lose your home if you fail to make the payments.

Additionally, your payments can vary from month to month, which can make it difficult to budget for them.

Cash advance on a credit card

LIGHTFIELD STUDIOS/Adobe businessman asking woman to sign loan contract

If you find yourself in an emergency where you need cash fast, taking out a cash advance on your credit card is one solution. However, it might not be the best option.

Cash advances can come with high fees. You will also owe interest on that money just as you would if you swiped your card to make a purchase, and the interest rate might be higher than the rate you would pay on something you purchased.

There are also limits to how much cash you can request. The cash advance fee is included in that amount.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it

Unconventional personal loan

88studio/Adobe real estate agent stamping mortgage loan agreement

Unconventional personal loans are typically easier to qualify for than traditional loans. They could be a good choice for borrowers with limited credit, employment and income histories.

Unconventional loans aren’t provided by traditional banks, and lenders are often online-only companies, so this is a potential drawback for some people.

These nontraditional lenders will typically perform a “soft” credit pull to obtain loan terms and a “hard” pull only if borrowers choose to move forward. 

The “soft” credit pull won’t impact your credit score, so you can continue searching for a lender safe in the knowledge that your score won’t suffer if you don’t like the terms and decide to back out.

Loan against a 401(k)

Rawpixel.com/Adobe Loan form Approved Concept

If you have a 401(k), you might have the option to take out a loan without going through a bank. Unlike with early withdrawals, you won’t need to pay taxes or penalties with a 401(k) loan. 

And while you will pay interest, those payments will go back into your retirement account.

However, your retirement plan might have limits on these loans. Reducing your 401(k) balance — even temporarily — can slow investment growth. 

And if you lose or leave your job, you might be required to pay back all of the loan promptly. If you don’t, you could be subject to taxes and penalties.

Loan against a life insurance policy

Thitiphat/Adobe real estate agent asking to sign contract

If you have permanent life insurance — such as a whole life or universal life policy — you might be eligible to take out a loan against the policy’s cash value.

Borrowing against your life insurance policy helps you avoid a credit check and often comes with favorable repayment terms. 

However, it can take time for your policy to build a significant cash value, and failing to repay the loan could result in an insurance lapse or decreased benefit.

It’s also important to consider how comfortable you are with your beneficiaries receiving a lower death benefit amount should anything happen before the loan is repaid.

Crowdfunding

Song_about_summer/Adobe investment and finance concept

Raising money is one option if you are trying to get cash to start a new business. Crowdfunding sites, such as Kickstarter and Indiegogo, allow new companies to raise money through donations or investments.

If you don’t want to offer a portion of your company to investors, you can try offering early access to products or services in exchange for contributions.

Small business microloans

fizkes/Adobe Happy african american guy receiving loan

Small business microloans are another option for kickstarting or growing a business. The Small Business Administration (SBA) has a program for microloans up to $50,000. You can find information for applying for these microloans at your local SBA office.

Small business microloans are provided by the government. If approved, your funding will come from local organizations.

Bottom line

Freedomz/Adobe Estate agent shaking hands with customer

Utilizing unconventional loan options can help you eliminate some money stress now. However, taking out nontraditional loans can come with consequences that might impact your financial situation later.

It’s important to fully understand the terms of the loan and consider your ability to repay it before committing. Borrowers should also consider whether any potential consequences are worth quick access to cash.

If you are unsure whether one of these options is right for you, speak with a financial advisor.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details