With the global economy in a permanent down-swing many people are falling behind on their financial obligations. This leads to poor credit scores and a general sense of panic when it comes to finding the money you need at a time when you most need it. However, there are still options, even for those with very bad credit. Loans are available with certain terms and conditions that offer even those with the worst credit history a chance at new financial life.
Who Would Loan to Me?
This is a question that a lot of people with very bad credit ask. They know that they have made mistakes and they are afraid that many lenders would never even consider them. But even with very bad credit, there are loans that you can get since lenders are willingly entering into a contract with someone with a questionable past.
These lenders are willing to assume a risk, but in return they ask that you meet certain qualifications that assure them that you can and will repay the money that they lend to you. You therefore need to prove your financial abilities in terms of bank statements, income statements (either paystubs or tax returns) as well as a clear, verifiable employment record that will remain stable throughout the term of the loan.
A company who specializes in giving loans to those with very bad credit will look at all these factors and really determine what your abilities are in terms of monthly payments.
Details of Bad Credit Loans
The lender who offers you this loan will be certain that he knows how much you can afford to repay each month and then determine the amount he lends to you and the term of the loan based on this. However, there are some general rules of thumb you should be aware of to see if they meet your needs.
If you have collateral such as a home or land to put up in a secured loan, you are at a distinct advantage in getting this loan regardless of very bad credit. You can generally get a loan for anywhere from $5,000-$75,000 depending on the value of the property that you leverage. In addition, these loans will carry repayment periods that range from 5 years to 25 years. The purpose of these loans is up to you and they can be used for a variety of reasons such as home improvement or car repairs.
If you do not have property to put up in a bad credit secured loan, then you need to look into the unsecured option. These are still available to those with very bad credit, however in smaller amounts. Generally, unsecured loans can be obtained for anywhere from $1,000-$25,000 and the repayment period will range from 1 year to 10 years. However, it is important to note that the lack of security present in unsecured loans will lead the interest rates attached to them to be much higher than secured loans.
How to Get the Loan You Need
Before you begin your loan search, there are some important steps that you can take to help the process. First, make sure that you order a copy of your current credit report. This will help you to know what you are up against in terms of the status of your credit and also allow you to check if there are any erroneous items on the report that are impacting your current credit score.
The lower your credit score, the higher the interest that you pay will be on any loan regardless of where you get it. However, there are many people who specialize in lending to those even with very bad credit scores. This is why going online and checking out several lenders and the different packages that they will offer you represents your best bet in finding the money you need.