Friday, December 27, 2013

Personal Loans for Those With Bad Credit

It has happened to all of us, both good and bad credit holders. We have an unexpected expense. The car throws a rod, the refrigerator is turning into a mold factory, an expensive new prescription is needed to treat an unforeseen medical problem. Maybe a bill you have set aside has suddenly come due - in full! These unfortunate demands and other situations rise up in lives daily and sometimes the only way to get rid of them is to throw money at them. You could find that cash by drawing a personal loan for those with bad credit.

Credit Histories and Income Are Scrutinized

You need to pull your credit reports. You need to examine each thoroughly. Typically there are errors. You should get those taken off your reports, but remember this can take 1-3 months. So prepare before you go shopping for your personal loan for those with bad credit. However, understand that your scores will not be the deciding factor all the time. More important to these lenders is your debt to income ratio. Lenders will want to know about your current obligations and your income. They want to be sure that you have enough money left over to meet another debt.

Two Types of Personal Loans for Those With Bad Credit

When you apply for your personal loan for those with bad credit, you will see that most lenders offer two options - secured and unsecured. Secured loans are those wherein the borrower offers collateral, or valuable property, to secure the loan. If you default on the loan, the lender can seize the property and use the proceeds to cover the cost of the loan. Because of this security, interest rates are often much lower.

For secured personal loans, the collateral can be a house or other real estate, stocks and bonds, or even a late model car. Ask the prospective lenders which type of property they will accept. Unsecured loans have nothing to back them except your spoken promise and your signature on the dotted line. To compensate for the increased risk, the lender is obliged to ask for higher interest rates for your personal loan for those with bad credit.

Predatory Lenders

Never take the first offer. One good offer means there are probably two more out there even better. Personal loans from traditional lenders (for those who can get them there) as well as from private lenders carry the legally highest interest rates than for any other type of loan, whether the borrower has good or bad credit. Of course, the better your credit scores, the lower your interest rates. Do not fall victim to predatory lenders.

If someone says they are doing you favor because of your credit scores, walk away immediately, they are out to get you with high interest rates and exorbitant fees. Once you have selected four or five lenders whose terms and conditions you like, research each company thoroughly. Try the Better Business Bureau online listings. Always read all the fine print. No question is a silly question. Understand the terms and conditions of your personal loan for those with bad credit thoroughly.

Credit Repair Possibilities

Another good thing about personal loans for those with bad credit is that they offer an opportunity to put some shine on your credit history. You should make sure you make every payment on time and in the amount prescribed in your contract. If you keep doing this, even with small loans, your credit ratings will increase immediately and even dramatically.

Payday Comes Early With Payday Loans

Payday loans are fast loans that are given to salaried people on short term basis with an intention of them getting the money to use in emergency cases. The loan is to paid back at the end of 30 days which is during their pay check. These quick cash loans act like advance payments and are ideal because one does not have to wait until the end of the month to get their financial issues sorted out. They come in handy especially in an instance where one needs to pay up utilities that are due, get fuel for their vehicles and other important bills that need to be settled. The money borrowed is given by a funding firm and it is to be paid back with interest.

The loan can only be given out to persons who are qualified. This is because not everyone is eligible for quick loans. Some of the requirements that would qualify one for quick cash loans include

• One should have attained the age of 18 years and above to be legible for fast loans. At this age a loan firm is sure that they are able to get an income.

• One should have a job that offers them a salary at the end of the month. This is because through the salary earned the lender is assured of getting their loan paid. The salary should have a given tax rate.

• It is required that one has an active bank account where their salary is processed.
Quick loans can be obtained by anyone with the above qualifications from anywhere. One should take precaution not to take loans with an intent ion of having fun. This is because they have a very high annual interest rate of up to 2150 percent and this may render a person bankrupt. The advantage of these quick cash loans is that one does not need to have a good credit score or report to acquire the loan. The lenders will never ask their clients to provide collateral in order for them to qualify for the loan.

The processing of these loans takes a very short time to get to the bank account. It can only take a period of about an hour to get into one's account. The fact that one is given a short repayment period, it is a contribution to the high rates of interest that they are to be paid. They are ideal for sorting one's financial shortfalls, ensuring that one is stable and aid in solving pressing issues that require small amounts of cash. The amount of money released into one's account will be determined by how much one earns. It also wise to take up a loan amount that one is sure that it will not affect their financial status even as they pay it back.