Has your credit score plummeted in recent years due to job loss, sickness, or poor management of your available credit? If so, you may have begun to wonder if you will ever qualify to receive a loan again. The truth is, those with bad credit do have a difficult time finding a lender who will certify bad credit loans, but it is not impossible. There are loans that are known in the lending industry as bad credit loans, and they are becoming easier and easier to obtain.
A bad credit loan is a loan to use for whatever purpose you may have. Perhaps you need to buy a car, do home improvements, buy new furniture or home furnishings, or take a vacation. It is designed to give those with damaged credit files a chance to turn their credit situation around and get a loan that is tailor made for their credit type.
Loans Up To $10,000
Bad credit loans start out at $1,000 and may be granted in amounts up to $10,000 or more, depending on your situation and a number of other factors. Some factors that lenders look at when deciding whether to approve your loan and the amount that you qualify to borrow include your current income and whether or not you have any security to pledge as collateral for your loan.
Pledging security for your bad credit loan can be collateral in the form of your home, your car, truck, SUV, motorcycle, or motor home, or other piece of real estate or real property that has an office title of ownership attached to it. When reliablecounter blog you pledge collateral against your loan, you are agreeing that the lender may seize and sell the property in the event that you do not follow through with the terms that are established in your loan agreement or promissory note.
Pay Off Higher Interest Debt
Bad credit loans are often taken out by borrowers with derogatory credit files to use in consolidating their debts and paying off lenders. A great debt that you might want to consider for this type of bad credit loan is your credit cards. Your bad credit rating might have affected the amount of interest that you pay on your credit cards each month.
Oftentimes, just missing one payment or even being late on a payment to your credit card issuer will result in the lender raising your credit card interest rate to the default rate (this is in your card member agreement in the fine print). The default rate on most credit cards is 19.99% or higher, which means that you may be paying 1/5 of the amount of your balance in interest each month. Loosely translated, this means that your minimum monthly payment is just covering the interest on your balance. By using part or all of your poor credit loan to pay off high interest credit cards, you do your financial picture a great service by paying off this high interest accruing debt while improving your credit rating when you make monthly payments on your poor credit loan.