Because of the recessionary economy and the increasing number of people enduring bad hits on their credit reports, an odd thing has occurred. Banks have tightened their lending qualifications. It is difficult for even good-credit clients to get a loan from them. The economy is in turmoil, people are losing their jobs, but folks with bad credit still need loans. So, private lenders have responded to that demand for bad-credit, personal loans in droves. The market is lucrative. Competition is fierce. The consumer benefits from this competition as it tends to keep interest rates and fees low.
Preparing to Shop
Just as you do before you go to the grocery store, you must prepare. You need to check your budget. Once you have paid your regular monthly obligations, how much money is left for the bad-credit, personal loan you need? You also will need some documentation:
- Government Identification (often two forms).
- Proof of Job Retention (how long on the job, usually three months minimum).
- Proof of Salary (pay stubs, direct deposit bank statement).
- Active Bank Account (direct deposit checking).
- Proof of Residence (utility bill with same address as identification or bank statement).
Banks and Credit Unions
The first logical choice is to approach your bank or credit union to get a bad-credit, personal loan. This is especially true if you have been with them for some time, if your accounts have always been clean, or if you have investment or retirement accounts with them. The smaller, local institutions are the most likely to lend with these conditions. Chances are you will be refused, but the loan officer will probably give you an honest assessment of your financial situation and why you were rejected. This assessment will help you gain control of your finances and help you search for other lenders. On the other hand, you may be surprised with a nice little loan package.
Alternative Lender - Prosper
This lending service matches private lenders with prospective borrowers in a sort of lonely-hearts way by using want ads. The private lenders take a more human approach. Banks, credit unions, and other lending entities cannot seem to muster this approach. Because these lenders take that approach, they understand that everybody encounters a financially rough spot in their lives once in awhile. Several lenders may chip in if you need a rather large amount. Use your search engine to find similar alternative lenders. Direct the browser with this key term: Alternative Lenders.
Payday or Cash Advance Lenders
A very easy way to avail yourself of the funds you need is to go online. Once you direct your browser to Personal Loans, you will be rewarded with scores of lenders who may work with you for a bad credit personal loan. And they are all in one place making comparison shopping very easy. As noted earlier, competition is heavy so you will be able to choose a couple of lenders that have the lowest interest rates, low or no fees and repayment terms that are easy on your purse and your budget. Ask the top five lenders for bids.
Checking Lenders While They Are Checking You
While the lenders are preparing their bids and looking at your financial situation, you should check the reputation of each of them. The best venue to start your check would be to go to the online listings of the Better Business Bureau. They should have graded the various lenders and they should have feedback from past customers. You might also join a few personal finance forums that have sprouted up online and find out what kind of experience other borrowers have had with the lenders.