With the economy in dire straits it is no surprise that 25% of Americans are living with bad credit. Life with bad credit often means living paycheck-to-paycheck without much room for emergencies or missteps. And, should something happen, bad credit can really limit your options in terms of loans. Yet, there are places and people who can help out those with bad credit who are in need of cash through personal loans.
The three tips outlined below will help walk you through the options that you have in terms of personal loans when you have bad credit. Though there is no doubt that bad credit is a lending obstacle, it is not the end of your lifeline in the lending world.
Tip #1: Think Outside the Traditional Box
Most people who have bad credit have already gone to their home bank looking for money. This is obviously a good move for those with fair and good credit scores since there is security in having a prior relationship with those lending you money. However, people with bad credit scores are in a different boat entirely and need to look outside traditional means and traditional lenders to find the money that they need.
There are many options available online today and many of the lenders that you find are both legitimate and helpful. The trick is to do the research before you contact them and use that research to know who is working for you rather than just trying to scam you. The Better Business Bureau is a great resource for this research and you should always do a basic check on anyone you are considering through this agency.
Tip #2: Continue the Education Process
While the BBB is a really great start for research into online lenders, it should not be the last stop. The information that this agency provides will give you a good insight into who is trustworthy, but you also need to know the details about their products and services before entering into negotiations.
The website of each lender should provide you with basic information about the packages and lending deals offered. There should also be service included such as consultations without fees or obligations. A good lender for bad credit personal loans will also have a program worked out specifically for people in this position.
Tip #3: Do Not Just Learn, Understand
In order to avoid further damage to your credit and to make sure that you are entering into a good deal with a good lender, it is essential to make sure that you understand the obligations for this loan in plain language. You should work these details out before a lender initiates a credit check, since a high number of credit inquiries can damage your bad credit score even further.
Make sure that you review interest rates with the lender to get an idea of the range that will be offered to you once your credit is determined. Figure out if the interest rate is fixed or variable and what the top rate is for any variable interest - fixed is always preferred, though. You should know if the loans offered to people with bad credit must be secured through either auto or home equity and discuss which of these options you can accommodate with your current situation. Finally, break the loan down into clear monthly payments and be certain that the money you will be required to pay back each month is manageable given your current budget.
It is really easy to get down on yourself if you are in need of a personal loan and have bad credit. Remember that there are options out there for you and that by using these three tips you are likely to find the money that you need quickly and with minimal hassle.