Here is the point, when you start thinking of exploring options on how to get a personal loan despite having a bad credit, you have to consider all the options and look thoroughly into the fact what suits according to your needs.
Guys, if you have bad credits and you are in need of a personal loan, then try to keep these 3 things in mind.
Look! There’s a Predator (lender) on Loose
Why I am calling the lenders predators? Since, they like to indulge in predatory practices. While there are many state laws in different places that can curb some of these illegal deeds, these practices are curbed mainly of those lenders who make offers to people with bad credits.
Therefore, you need to be a little choosy and select a lender who is not going to take advantage of your poor financial situation.
Personal on Bad Credits, Means Higher Interest Rate
Yes, system works that way. If you have a credit score more than 720, then you are going to have good rates. If the score is some way between 650 and 720 then you will be offered a decent rate and below 650 means that they are not at all attractive.
If a personal loan is quite urgent, then try to retain good credit score, it will pay back in the form additional interest that you would otherwise have to pay.
How will you improve your credit score in midst if such a financial chaos?
- Pay bills on time for six months regularly can increase your score by 20 to 30 points.
- Lower your credit balances.
- Grab a copy of your credit report and search for errors and if you are able to find errors then resolve the dispute by contacting the credit bureau.
It Is Good To Opt For a Secured Loan
Many secured personal loans are offered to person with bad credits, some of the common types include:
Car Title Loans
In this case, your vehicle will be the security and if you are choosing this loan, then remember that you have to carry a full insurance coverage.
Home Equity Loans
This are similar to car title loans, they just use the equity of your home as a security. They give better interest rate than other loans, but if you are in bad credit, then it’s difficult to have. Talk to various lenders, as you may find someone who could help you out in this matter.
Home Equity Lines Of Credit
Similar to the equity loan, but it is disbursed according to the preference. The rate is slightly higher than the equity loan, but it gives you the freedom of borrowing what exactly you need. Having a bad credit reduces the chances of having such a loan.
Having bad credits does not imply that you cannot access the money you desire to have. However, protect yourself from the vulnerability and gather knowledge and look into the options before you reach to a final decision.
Jason Stone is a freelance writer, professional financial blogger and reading articles on variety of topics is his favorite passtime act. He is working as a financial consultant in a reputed call center that lends help desk services to financial organizations.
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Category: Money Basics