Many people with bad credit feel that getting a quick bad credit personal loan will help them to stay financially afloat. However, they fail to realize that in the act of taking on this additional financial responsibility they put themselves at extreme risk for the future. Though taking an unsecured loan does not risk your home or car as a secured loan will, it is still a really big decision that should not be taken lightly.
There Are Options Available
The good news is that many private lenders are more than happy to extend credit to those in need regardless of their financial past. The difference between these lenders is in the rates, terms and ultimate amount of money that they will offer. If you want to find a loan at a low APR (annual percentage rate) despite your bad credit, you can do so through a simple four-step procedure.
Step One: Find the Right Lender
With all the options available on the internet today, finding a good lender is harder than a lot of people think. It is extremely important that you do background research into anyone you consider taking money from in order to ensure that they are legitimate and not trying to scam you.
One way to conduct such a search is through the Better Business Bureau (or BBB). There is a search tool located directly on the BBB website that will allow you to do a simple background check and get the basic information for a number of lenders. Consider using the search terms, personal loan or bad credit loan.
Once you have identified a few possibilities, take a note of all pertinent information such as their physical address and telephone numbers.
Step Two: Call Potential Lenders
The next step is to make contact with the lenders you have selected. Sometimes it is better to call them rather than filling out an online form since you protect your information and are able to feel out the business better. Make sure you are upfront about your needs and situation.
There are several items you should be prepared to discuss:
- Ask specifically about bad credit lending options and know and offer your FICO score.
- Ask about the APR that they offer for such bad credit loans and whether or not the rate is fixed (variable rates are big trouble!)
- Ask them about the payment plans they offer and know how much you can afford each month.
- Ask about the benefits in terms of total cost that would occur if you were able to find a cosigner.
Step Three: Get a Quote
After discussing the above issues, you will need to get a quote from the lender. This can be either a verbal offer or they can mail or email you a formal quote. The point is to have a basis upon which to compare the rates and terms offered by each of the lenders you contact.
Step Four: Compare Rates
After all this information gathering lay out all the plans that different lenders have offered you and find the one that best suits your needs. You obviously want a low APR, but it needs to be fixed and the term of the loan has to be long enough that you can reasonable expect to make the payments on time and in full each month.
Benefits of This Approach
Remember what I said in the introduction, taking a loan is serious business. If you have bad credit, you need to do your homework and make sure you get the best deal possible. This systematic approach will get you on the right path to finding the loan that you need at a rate you can afford without risking your credit even further.