If you need a loan quickly, it can be a struggle to gather all the necessary paperwork and documentation – particularly for borrows that are very young, have limited credit history, or have no credit history. There are many reasons that you may be under qualified for a loan besides this though – in some cases, if you are self-employed, you have no support documents to prove your income.

If you cannot prove your income, have no credit score whatsoever, or have no support documentation, it is very likely you will be rejected by banks when you apply for any time of loan, be it auto loans, mortgages, or just personal loans.

Under qualified loans being granted are occasionally known as subprime loans. Why? Because the candidates seeking these loans are underqualified, less than ideal, or high risk borrows, making them "subprime" or under qualified to obtain a loan in the amount they seek (or even obtain a loan at all).

In finance terms, subprime lending – also known sometimes as second chance lending – means making loans to those who seem to have difficulty making the repayment schedule: high risk borrowers whose credit scores reflect financial setbacks like divorce, medical emergencies, or unemployment, or who are self-employed, and thus are unable to produce adequate supporting documentation indicating income – and therefore no support document to show ability to repay the loans.

Even though financial setbacks that have negatively affected your credit score do not always reflect current circumstances or ability to make timely payments, having a poor credit score or lack of documentation almost always means that you will be rejected by banks when you go to apply for a loan. How are you supposed to rebuild your credit (or build a credit history if you are starting from zero) if you can’t get a loan from the bank?

The answer is to go through a different lender, one that is not affiliated with the bank, and one that understands that we all need second chances sometimes. You can apply for an under qualified loan, from a lender that takes greater credit risks by loaning to people who are under qualified for a bank loan.

Interest is usually somewhat higher when you take out this type of loan, because due to your circumstances, your credit score or lack of qualification indicates that creditors are taking a greater risk when they make loans to you, but if you need a loan quickly for an emergency, or simply need to reestablish credit, an underqualified loan to be the perfect first step in getting back in the right direction.