Personal Loans With Bad Credit Can Be Obtained

Many people think that bad credit is the one factor that will make your ability to get a personal loan impossible. The general feeling is that the stigma of a bad credit score is the one factor that will lead a lender to automatically reject you. However, more and more lenders are becoming willing to offer a personal loan to those with bad credit under new and really interesting specialized programs.

Bad Credit Comes from Many Different Things

The truth of the matter is that not all people with poor credit started that way. Oftentimes, especially in today’s nasty economic market, there were circumstances far beyond the individual’s control that led to the bad credit. This includes the housing bubble that burst and layoffs that came as a result. Many people are just not at fault for a poor credit score and deserve a second chance to get any loan, but especially personal loans.

The Benefit of Personal Loans

For those with poor credit who are looking towards improving their financial outlook over the long term, personal loans can provide a special form of relief: debt consolidation. These loans are offered as an unsecured loan which means that it is not necessary to offer any collateral as insurance against default. Unsecured personal loans can be given in larger amounts (up to $25,000) and used to consolidate many payments, such as credit cards, into one, easy monthly bill.

How Bad Credit Loans Work

Clearly, there needs to be some sort of catch to this scheme, right? Well, yes and no. It is fully possible to get a personal loan with bad credit, however there are also some compensations that you will need to make in order to do so. These include:

  • Lower Principle Amounts – depending on the severity of your poor credit, you may only qualify for a personal loan of $5,000 or less to start. However, after responsibly repaying that loan, you can hope to receive more money the next time.
  • Higher Rates of Interest – poor credit does have consequences, and this is the most famous of them. You will need to pay a higher interest rate on your personal loan than someone with good credit. However, this does not mean that you should pay so much interest that the loan is no longer valuable.

Specialty Lenders for Bad Credit

Unsecured personal loans are offered to people with poor credit every day. However, these loans are not usually found in the traditional places. Instead, online lenders offer the best bet for those interested in finding a bad credit loan without a being charged terribly high interest rates.

The bonus is that these bad credit lenders generally specialize in working with people in similar situations as yours. They understand the barriers set before you and are generally able to use their experience to counsel you on your best moves as you go forward.

Getting a Personal Loan Today

Online lenders operate 24/7 since their “offices” are virtual. That means that you are able to access the programs available and begin to compare rates immediately. Sometimes you can get “automatic quotes” to use as a base measure for comparison.

On a final note, make sure to get quotes from 3-5 different lenders before making any decisions and also complete a thorough background check on any company you consider before divulging personal information such as your social security number. Once you have looked at the lenders available, getting the personal loan you need today, despite poor credit, is easier than you think.

Get Student Loans With Bad Credit: A Rundown of Your Basic Options

When you are interested in going to school in order to enhance your education, the stress of paying for that education can sometimes be more than many people can bear. However, even if you have bad credit, student loans are readily available for your use. In fact, many student loans require no credit check at all and public or government-backed student loans are virtually guaranteed. This article will give you the basic run down of how to get money to pay for your college education, despite your bad credit score.

Bad Credit and Loans

It is a generally recognized fact that trying to obtain a loan with bad credit is nearly an impossible task. Lenders use a person’s credit score in order to assess whether or not that person is reliable as a borrower and judge them based on that number alone. Or so many people think.

However, the process of determining who does and does not receive a loan is much more complicated than simply looking at a credit score. Oftentimes, a creditor will take into account both the circumstances that led to your bad credit as well as the type of loan that you want. In the case of a student loan, the thought is that the increased income you receive as a result of your education will more than compensate for the risk the lender is taking by giving you a loan. Basically, he is relying on your increased income to supplement the loan he offers.

Types of Loans Available

There are two main types of student loans to avail. The first is a government-sponsored loan which requires no credit check. These loans, also called Stafford Loans, are given to a student based on his status as a student only. The other qualifications for a Stafford Loan are really simple. They include:

  • Completing a FAFSA form.
  • Being a U.S. citizen, a permanent resident or a qualified non-citizen.
  • Attending a participating institution at least half time.
  • Being current on the repayment of all other student debt.

That’s it. You can be in debt in other areas, such as credit cards or personal loans, but as long as you have no other student loans or are currently repaying the ones you do have, you are all set for a Stafford Loan. There is no credit check required which means that your bad credit score will not have any bearing on your qualification for funds. The only determination that your application will secure is the amount of money you will be eligible to receive and whether or not the interest on that loan will be subsidized or unsubsidized. This determination is based on need alone.

Private Student Loans

You should always look into getting a government-sponsored student loan first since the interest rates on those loans are both low and fixed. However, if you find yourself still needing additional funds for school, private lenders can also help. These lenders will offer additional student loan funds to you based on a number of factors. Though this time credit will come into play, the fact that you are using this money for school will impact a lender’s decision. If you are interested in receiving a private student loan, bad credit is not a barrier. However, do realize that there will be penalties.

Funding Your Education

Overall, funding your college education is possible with student loans. Your bad credit will not matter in many cases, as no credit check is required when applying for federal loans. Also, additional funds can be acquired from private lenders that will take the use of these loans – your education – into account over your bad credit score.

Obtaining Loans For People With Bad Credit

If you need loans for people with bad credit, you are not alone. Many people have bad credit in these economic times. Interestingly enough, the majority of these situations are not due to financial mismanagement but rather just being a victim of circumstances such as a job layoff, unexpectedly high medical expenses, a very messy divorce, or other similar things that cannot be predicted with any degree of accuracy.

If you think you have poor credit or even if you know you have bad credit, one of your first steps, even before you go to apply for another loan, is to back up a step and find out exactly what your credit score is and why you may have the bad credit label. This is a much better approach than applying for yet another personal loan and getting denied, which does not put you in a good position and also serves to psychologically throw you a curve.

First of all, you need to understand why you have the bad credit label. It is probably because you have missed or been consistently late on your payments on an installment loan, a car loan, maybe your mortgage payments. Presumably the reason you were late or missed the payment is because you didn’t have the money available at the time that the payment was due, and not because you simply didn’t get around to making the payment.

Remember, a credit score is calculated by the credit bureaus based on your credit HISTORY. Your history takes time to develop, so missing or being late on a single payment or even twice when your payments on that account and others have always been on time is not going to give you a bad credit label. Again, it is a historical account of your paying habits, not isolated incidents, that is going to have the greatest impact on your credit score.

The best thing you can do is to start making all your payments on time each and every month. Over time, this will definitely improve your credit score. You should also look for errors on your credit report, which are frequent and may be giving you a worse credit score than you really deserve. Many people are not aware of this fact, which you will not realize until you get a copy of your credit report and examine it thoroughly.

But if you have bad credit and need a personal loan now, do you still have options? The answer is definitely yes. There are many companies that specialize in providing personal loans for people with bad credit. Be aware that the interest rate is going to be higher because of the lender’s perceived risk of lending you money, but if you take the time to ensure that you make payments on time to repay this loan, this will only be in your favor as you strive to increase your credit score.

Having bad credit does not mean that you need to put your entire financial life on hold until it improves. Loans for people with bad credit are available and can definitely help you in getting your credit score improved so that next time you can get very aggressive interest rates on your personal loan.