You have probably heard this term, but do you really know what it means? It is the most important phrase in the vocabulary of any lender who make personal loans. Of course, every lender on the globe loves the premise that every loan he or she makes will be repaid according to the contract negotiated with the borrower. Alas, this does not always happen. So lenders carefully balance the interest rates they will charge against the possibility of them not getting paid. Mitigation conveys the message of making losses less painful. So, the math comes down to - the lower the credit score, the higher the interest rates.
A number of factors are in the mind of lenders as they look at the chances of being repaid: First, the amount of the loan requested. Two, credit score of the borrower. Third, the type of loan - secured or unsecured. Secured loans are secured by a piece of valuable property - real estate, stocks and bonds, even a late model car -- so, should you default, the lender can seize the property and sell it to cover the cost of the loan. Whenever you hear this word - term - it means the conditions of repayment - the amount paid and the timing of the payments.
Myths of the 100% Guaranteed Loan
As you can see, it is almost impossible to say that a loan is 100% guaranteed. This is especially true for a bad credit loan. But, if you need cash and you need it fast, this is the way to go. Before you start you quest, let us clear up a five more myths about the 100% guaranteed bad credit personal loan.
The First Myth: Any Borrower = Approval
Having become aware of what bad credit personal loans have to consider, it becomes plain why some borrowers are turned down. The 100% guaranteed is more or less an impossibility. The law does not object when a lender turns down a borrower. But, if you know where to look, you will eventually find a lender.
The Second Myth: Bad Credit = Rejection
This is so not true. Scores of lenders out there specialize in giving loans to folks with bad credit. There are many in that situation. So, the lenders have other factors the consider beyond the numbers on a credit score. One important consideration will be how much money you have left over every month after you meet your present obligations.
The Third Myth: Bad Credit = High Interest
Yes, lenders will push up interest rates on bad credit personal loans, but that does not necessarily mean that folks with bad credit will pay usurious interest rates. If some collateral is presented, interest rates can be significantly lower.
The Fourth Myth: One Lender = Success
It is a mystery that this happens: A borrower approaches a lender and is refused and then gives up. Even folks with excellent credit research and come up with a list of five to ten lenders and get quotes (or rejections) from each and then picks the best. You should tell every lender that you are getting quotes from others. You may get in the middle of an interest rate competition and that would be great.
The Fifth Myth: Bad Credit = Small Loans
While most folks seeking a personal loan are probably needing a small sum to meet an emergency, somewhere from $100-$1,500. But, it is not unheard for lenders to grant loans from $2,500-$10,000. Just do a lot of checking around and you will eventually find a lender.
Persistence and Courage Will Pay Out
Do not worry about refusal. Keep applying. Persistence and courage will help you get the cash you need. So get busy - a lender is waiting.