Applying for a Personal Loan With Subpar Credit – What to Know

Anyone that finds themselves with multiple balances on credit cards that have high interest may consider looking for a personal loan with bad credit. This allows them to transfer those balances and take advantage of a lower interest rate to pay off their cards. Sadly, many banks will turn them down due to their credit. Thankfully, there are ways to get a loan that will help them save money, even with that low credit score.

Whether due to financial issues, job loss, or just striving to build a good credit score as a first time user it is difficult to get a loan. The way credit reports work is always changing and there are many factors that affect a person’s credit. It’s important to stay in the know about how to build it, and what your options are. There are likely more options than they think. Here are some ways to apply for and get a personal loan with bad credit.

How to Get a Loan with Bad Credit

Having zero credit or poor credit is a major issue when looking to secure a loan, because that person is viewed as a high risk customer who may default. It’s important to accept that until the credit score is raised, one won’t be able to enjoy the standard lending guidelines offered by big banks.

For anyone that’s been turned down for a loan or who doesn’t want to pay monstrous rates, here are some options:

Consider a Home Equity Line of Credit

If there is enough equity in owned property, it’s possible to secure a tax-deductible, low-interest loan or line of credit that can be used in any way. The only downfall is that many don’t want to tap into their home equity as it puts the property in jeopardy if they can’t repay it. However, with a steady income and a bit of discipline then this can be paid off and is a less pricey option no matter what the credit score!

Try and Apply to Credit Unions

Credit unions are so much better than a regular bank. That’s because they are member-owned. Usually they are founded by people who have something in common whether it be living in the same area, or working in the same profession. They are nonprofit and have a sole purpose of helping members. They offer great customer service and low fees.

Borrow from a Friend

Consider what’s called P2P or peer-to-peer lending. There are even sites online that let a person borrow from someone directly rather than a bank. This form of lending is getting very popular and is quite simple. It’s a winning situation for both investors who want to earn interest and borrowers who enjoy paying lower rates. It’s the perfect solution when looking to apply for a personal loan with bad credit. Current rates with P2P lending are as low as 6%. That’s far lower than most credit cards.

Family Loans

If an online peer doesn’t pick up a loan request, there’s always a chance a family member might. However, it’s more than important to treat a loan from someone in the family just as a professional loan. It should be documented and recorded. A written agreement should show the interest rate, terms of repayment and collateral that’s going against the loan. It should also lay out all the actions to be taken if the borrower does not repay.

What About a Co-signer?

If one is searching for a personal loan with bad credit and they don’t have a family member or a friend that is available to offer the loan, maybe they would consider co-signing. This is when someone who trusts that the borrower can repay the debt would take a chance on them and be a back up to repay the loan should that person default.

Why Personal Loans After Bankruptcy Are More Than A Possibility

Many people who are facing insurmountable debts bow to the pressure to declare bankruptcy. It is not an ideal solution, but unfortunately, economic reality makes it the only practical choice. But the good news is that getting personal loans after bankruptcy is now more likely, with more lenders willing to accept the role that circumstance played in the decision.

This is a very different situation to a few decades ago, when declaring bankruptcy left a serious stain on a credit reputation, causing many traditional lenders to steer clear of such applicants. Getting a loan shortly after bankruptcy was almost impossible, but today it is a very real possibility.

With that in mind, the option to take such lengths in order to escape from crippling debt is more common. The fact that loan approval despite bankruptcy is an option later on means it has become a strategic choice. But are future personal loan options not affected at all?

Justifying Loan Approval

Despite the reduced stigmatization that bankruptcy has today, there is little reason to celebrate it as an option. There is still some hesitancy amongst lenders to approve applications seeking personal loans after bankruptcy. But at the same time, there are benefits, not least the fact that financial pressure is alleviated.

But, what about when a new loan is applied for? What is needed to secure the green light and be granted approval despite bankruptcy? Well, like any loan application, it is affordability that really matters – not the credit history of the applicant. So, as long as the applicant has a full-time job and has a low enough debt-to-income ratio, approval is possible.

And the ratio should be no problem at all, since through bankruptcy the applicant will have seen all of his or her debts cleared anyway. That effectively clears the way to getting a new personal loan.

Terms To Accept

Having a route to much-needed loan funds is great to know about, but actually securing that loan is not a foregone conclusion. Applicants need to understand that the consequences of bankruptcy include making future loans expensive. Lenders willing to grant a personal loan after bankruptcy will also charge higher interest rates.

What this means is that the monthly repayments on any loan are going to be that little bit higher, which in turn raises questions over the affordability of the whole deal. But with no other significant loans to repay, the chances of being granted approval despite bankruptcy are pretty high anyway.

Also, the size of the loans are usually limited with some lenders not willing to go over $10,000, and only comfortable with about $5,000. The term of the personal loan is usually short too (5 years). This is because bankruptcy cannot be declared a second time for a minimum of 6 years after the first, and lenders want the life of the loan to end within that period.

Securing Loan Approval

So what are the best ways to help an applicant on the road to approval? There are a few ways to do so, but probably the most effective when seeking a personal loan after bankruptcy is to improve your credit score in advance.

This is usually done by clearing a few debts, but since loan applications might be hard to get, it would be worth taking out a secured credit card instead. The balance can be small, but regularly making repayments for 6 months means a positive credit history is achieved.

It would also be worthwhile getting a cosigner to guarantee monthly repayments on the personal loan. This reduces the risk involve in the loan to practically nil, so approval despite bankruptcy is safe.

How Can I Buy a Car With Bad Credit?

According to an article in consumers affairs;

In general, it is better to go with a bank or an auto financing lender rather than the car dealership down the street that is offering a “buy here, pay here” deal. If you do wind up with a high interest rate on your car, work on rebuilding your credit score so that you can eventually refinance.

If you suddenly find yourself without a car you might be asking, “How can I buy a car with bad credit?”, well, You DON’T! I know not having a ride can be a problem, like how do you get to work, or what if you want to go out? Well as far as getting to work goes, see if a work colleague lives near you and chip in on some gas for a ride. As far as getting out from time to time, there’s always Uber.

You want to give yourself a few months to save up some money and pay cash for a vehicle until you can get your credit to a point where you can get a 6% or less interest rate. Your choice of vehicle will be better and the total cost for the vehicle will be a lot less.

Another problem with buying a car with bad credit that most people forget is car insurance. Your insurance premiums unfortunately are also based on your credit score. The combined monthly cost of your car and insurance could be challenging. Again, waiting until you have a good credit score will save you on insurance as well.

Here is an example based on $35,000.00 vehicle purchase at 20% versus 6% on a 5-year loan.

$35,000.00 at 20% interest you will pay over $15,000.00 in interest at 6% you will pay approximately $5,000.00 in interest. Quite a difference.

Your total cost for the vehicle is about $15,000.00 less in interest at 6%, and your monthly payment is approximately $250.00 less per month!

OK let’s play a little game, what if you took that $250.00 per month that you’re NOT paying in interest and invested it each month over the same 5-year time period with a 6% return?

Well you end up EARNING $3000.00 instead of PAYING $15000.00. I’d say that’s a pretty good argument for doing everything you can to avoid a high interest car loan.

Instead, put ALL your resources into getting your credit fixed. This will put you in to position to buy at a good interest rate with minimum money down. This will save you a ton of money and you won’t regret it!

Buy a new car or even a used car is never a good investment, but one you can’t avoid. Buy a car with bad credit, as you can see, is yet a worse scenario. Make sure you do whatever it takes to avoid this costly mistake.

If you considering purchasing a car in the near future and have some credit challenges be sure to check with one of our Credit Experts to see how you can improve your credit for the best interest rates and no money down options.

Securing Personal Loans After Bankruptcy: Secrets That Make It Happen

For those of us who think that bankruptcy is the end of the line, the good news is that this is absolutely not true. There are loan opportunities, with lenders willing to take the risk and grant personal loans after bankruptcy to those applicants that are convincing enough to ease their concerns.

There is a certain stigma attached to bankruptcy, with lenders recognizing the fact that a borrower escaped having to repay their debts by declaring bankruptcy. As a result, their view of the borrower is negative. So how can any lender be willing to grant approval despite bankruptcy?

Every person has the right to recover from bankruptcy. It might take a long time, but gradually the reputation of the borrower can be improved. And while a large unsecured personal loan may be elusive for as long as 10 years, baby steps can lead to complete recovery eventually.

The Rating Regime

There is no doubting that bankruptcy makes things more difficult for bad credit borrowers, but this is only because of the image that lenders have of an applicant with a recent bankruptcy ruling against them. Getting personal loans after bankruptcy is a challenge but there are ways to improve that image.

The fact is that lenders look at other factors when considering a loan application, and as long as these areas look strong, then the chances of getting approval despite bankruptcy is greater than they might have seemed.

These other considerations include the income and employment status of the applicant, as well as the extent of their current debt. If these factors are in good order then the application for a personal loan can be viewed positively. However, lenders cannot help but be cautious, and are unlikely to approve any large loan for quite some time.

Method In Their Madness

Of course, with the degree of risk involved in lending to someone with a bankruptcy ruling against them, it seems foolish for any lender to grant loans to them. But there are reasons why they are willing to grant personal loans after bankruptcy.

First of all, statistics show that those who have been declared bankrupt are eager to regain a positive financial status. This means that the applicant is highly motivated in meeting the repayment schedule, so granting approval despite bankruptcy is not such a major gamble.

Also, laws state that those who have been declared bankrupt cannot seek bankruptcy again for at least 6 years after the ruling. This means that the borrower is unable to escape any debts for a set period of time. The investment, in the form of the personal loan, is therefore protected to an extent.

Securing Approval After Bankruptcy

Improving your chances of getting approval on a personal loan after bankruptcy comes down to a few simple steps. Getting a secured credit card provides an opportunity to begin to rebuild a credit reputation. These cards offer limited credit, but just enough to provide a positive impression in the updated credit report.

Providing a cosigner as part of the application is a huge boost to the chances of getting approval despite bankruptcy. This is because the cosigner guarantees the monthly repayments will be made. As a consequence, the interest rate falls too, making the loan all the more affordable.

Searching for online lenders is likely to end happily, with online lenders recognized experts in bad credit lending. This means the terms of the personal loan are more suitable and the chances of approval are greater.

How to Get Personal Loans After Bankruptcy

Bankruptcy can turn your financial world upside down. Bankruptcy leaves an indelible mark of negativity on your credit file that can hard to escape. If you have filed bankruptcy this year, you certainly are not alone. There are over a quarter of a million bankruptcy petitions filed each quarter of the calendar year, on average, in the United States alone. There are many factors behind the rise in the number of bankruptcy proceedings – including the economic downturn and financial crisis that has left many American workers jobless.

Perhaps you are among those left looking for work without money for your bills – or maybe you have experienced a recent illness or injury that left you unable to work and therefore you became delinquent on important monthly payments – such as your mortgage or car payments. Filing bankruptcy becomes the only option for many individuals – and provides a means for them to protect their assets from foreclosure and repossession. If you have recently come out of bankruptcy – now is the time to begin rebuilding your future and improving your borrowing outlook.

Recovering Your Good Name

To begin the process of rebuilding your borrowing reputation and your good name, you should start with a personal loan. A personal loan can be either secured or unsecured, and there is a big difference between the two – mainly the amount of interest that you will pay on each. Because of your new status as a borrower who has filed bankruptcy – you should expect to pay more interest on either than the normal borrower would. Keep in mind, however, that paying a bit more interest now will help build your credit back up in order to qualify yourself for bigger loans with less interest later down the road – once you have established your newfound ability to manage your credit.

Two Versions Of The Personal Loan

A secured personal loan after bankruptcy is the easiest to obtain financial product that is available to borrowers of all incomes. A secured loan is a loan that is backed up by pledged collateral – typically your home or late model automobile. Your lender will place a lien against the property that you pledge for collateral that will be removed when you completely repay the lender. You can get secured loans from $1,000 up to $20,000 – depending upon your income and your ability to repay the lender for the money they extend to you. It is most generally accepted among financial advisors that individuals who have experienced recent bankruptcy start out at $5,000 or below for their first personal loans following bankruptcy discharge, but you may ask for more if you have a true need and are completely sure that you can repay the amount with ease.

An unsecured personal loan following bankruptcy is a bit harder to get. These types of loans are the riskiest in the eyes of the lender because they are not receiving collateral against the loan. It is most advisable to apply for the unsecured version of the personal loan with a creditworthy cosigner who will stand behind your ability to repay the lender.

Online Lenders Specialize In Post Bankruptcy Lending

You can find the loan products that are specifically tailored for your personal situation after bankruptcy on the Internet. There are many lenders who specialize in post bankruptcy personal loans that offer these loans online for borrowers at great rates that are highly competitive with traditional walk-in banks.

Bad Credit Auto Loan: A Way to Repair Your Credit Score

Having a car has become a necessity in today’s fast growing world. But to obtain a car you need a good credit score. What do you do when you know that it is not as good as it should be and you find yourself in a tight spot financially? The first thought that comes to your mind is whether you will qualify for an auto loan. And, why would a lender approve loan application of an individual who has a spotty credit score? But the good news is that you can get a bad credit auto loan.

What is a Bad Credit Auto Loan?

The simplest definition is that you can get money for buying a car with a bad credit score. A credit score depends on your ‘creditworthiness’. So when you have a bad credit score, getting an auto loan becomes difficult because a lender thinks that you are unable to repay your debts. Today, owing to online services many lenders offer attractive interest rates on a bad credit auto loan providing the borrower a sigh of relief!

It’s no Picnic!

Getting an approval for a bad credit auto loan is no picnic. It means that when your credit score is not in your favor, it becomes difficult to get approval. But, with the following guidelines, approval becomes easy:

· When your credit score is in question, don’t assume that it must be bad. The wise way is to check it yourself.

· It is the best time to shop around for a bad credit auto loan. Many lenders see borrowers with credit issues in a positive light. So it is important to shop around in order to make the right decision.

· Go online! Various loan options are available online which not only suits your needs but also offer you best interest rates.

· Consider a co-signer. A co-signer provides the security which lenders are looking for in a loan application. Your co-signer’s financial condition should be good in order to compensate for your low score.

Different Lenders have Different Viewpoints

Something that is multifaceted can be looked at from many points of view, with each point of view showing something new.

· You don’t have to worry about your credit score since the lenders are not going to looking at it. Instead, the lenders will look at how likely you will pay off the loan in future.

· The approval rate for a bad credit auto loan is higher than other conventional loans.

· It gives you an opportunity to improve your reputation. If you make timely payments, it can provide you with a chance to build a stronger financial standing.

On the approval of a bad credit auto loan, you will now have the money to buy a new car. You will have fixed interest rate and monthly payments. So now when you make the payments on time, it will not only repair your credit score but also build a good reputation with the lender.

When your credit score is not good, Online bad credit auto financing is the perfect way to buy a car. Apply with EZ Auto Finance and the online loan expert will help you to become a proud owner of your favorite car. Also, it will enable you to obtain no down payment auto loans.

Personal Loan and Its Different Advantages

A personal loan is an unsecured loan which is offered to a consumer for catering their various personal needs such as the renovation of a house, marriage, home appliances, buy vehicle amid others. This is offered after verifying one’s ability of paying especially the income source and also according to their credit history. A nominal processing fee will be charged and the sum as per a person’s paying ability will get credited to their account. In fact the loan payment is made via fixed installments which also includes interest and for fixed time periods. The icing on the cake is these days personal loans are a smart choice as one do not require going through a lot of formalities and tedious paperwork. Most of the financial institutions and banks offer personal loans today and the rate of interest is also quite reasonable.

Discover the different benefits

• Available easily- to get a personal loan is no longer a challenging affair. It is offered by almost all financial institutions and banks at a reasonable rate of interest. Compared to other loans it is convenient and easy to get

• No middleman or agent involved- for availing a personal loan one will not require taking the help of an agent or a middleman. This will avoid unnecessary expenses and delays. A person can approach the financial institution or bank for the purpose directly

• Unsecured loan- this is indeed an unsecured loan. Here no collateral security is needed for availing the loan. In fact, all that is needed is one’s ability of paying back the money.

• Less processing time- because it is accessible devoid of any guarantee or security the processing time needed to get this is naturally less compared to other loans

• All purpose loans- in this form of loan it is not compulsory for a person in specifying the reason for which they will be using the money.

• Minimum paperwork- to get a loan will not need any asset verification or other forms of certificates and proofs which include ample paperwork as none of one’s property is mortgaged

• Offers and schemes- different financial institutions and banks keep announcing offers and special schemes on personal loans, especially for the professionals such as architects, doctors, chartered accountants and the like

• Amount and tenure- these loans generally are provided varying from Rs 15000 to Rs 20 lakhs differing from one bank to another. The repayment can be made through EMIs

The bottom line is, rather than borrowing money from a credit card it is always better to choose a personal loan as the rate of interest is comparatively lower. So reap its utmost benefits.