Along with a bad credit history will come many loan application rejections from most traditional lenders. However, non-traditional lenders are cognizant of the financial turmoil that has beset many consumers. In spite of poor credit ratings, these lenders are offering ways for folks to get bad credit personal loans, even for amounts as high as $ 5,000!
Two options exist for bad credit personal loans
You can choose between two types of bad credit personal loans – secured and unsecured. In spite of poor credit ratings, many Americans hold valuable property in the form of real estate, stocks and bonds, and even jewelry or a late model vehicle. Some lenders will allow these items to be posted as collateral or security for a loan.
Two advantages are to have had with these secured loans. One, you can usually request more funds than would be allowed under an unsecured loan. Also, since the loan is not as risky as an unsecured loan, you will be able to negotiate lower interest rates which will result in considered savings.
Preparing to shop for your bad credit personal loan
If you are suffering from judgments, defaults, late payments and are in need of financial relief, you need to prepare yourself. You need to have a solid budget so you know how much of monthly payment you will be able to afford after you meet all your regular obligations. You must have a firm amount of the loan you will request. Never borrower more than you need.
Even though lenders who specialize in bad credit personal loans may not even consider your credit history, you should check your credit reports. You may not be as bad off as you think you are, and you will be able to scrutinize your report and clear up any discrepancies. Understand that with poor credit, you will be paying higher interest rates to offset the risk the lender incurs by making these loans.
You will be required to present some documentation. Having this stuff collected will help speed up the loan application and approval process. You will need bona fide means of identification, usually government issued, as well as proof of residency. You will have to present proof of employment and salary. Of course, the lender will want to see that you have an active bank account, preferably checking with direct deposit.
Online lenders will probably be your best bet for approval
Once you have prepared yourself, your budget and your credentials you need to fire up your computer and just punch you favorite browser with the key phrase: personal loan. You will be rewarded with more lenders than you can shake a stick at. You will even find brokers who will take some general financial information and come up with a list of lenders most likely to approve your loan according to the amount you want, the interest you want to pay, and the repayment terms that are comfortable to you. Shop for the best deal to suit you.
They are not a panacea but they sure can be a help
Getting a bad credit personal loan is not going to solve all your financial problems. But it will help you meet any emergencies, or do some things you need to do, even home improvements or a badly needed getaway. Just be sure you pay back the loan according to the terms of your contract. That will steer you clear of problems down the line and even improve your credit rating.