Home owners with bad credit can land a $50,000 personal loan by using a non-traditional lender. It may appear to be an amount that is only the stuff of dreams, but there are lenders who will help you with your rather large financial need. Here are five considerations while you are on your quest for a bad credit personal loan.
Consideration One: No Traditional Lenders
Traditional brick and mortar lenders such as banks or credit unions are not going to grant you a five-figure loan. They have tightened their credit benchmarks and even good credit borrowers have a hard time finding loans with them, even if they are home owners. Because of this, many private lenders have stepped into the lively market and will work with bad credit borrowers. Most of these lenders can be found online and there are scores of them. Competition can be rather fierce.
Consideration Two: Research Lenders
Once you go online, you need to collect the bona fides of at least five lenders. Your first step should be to check the Better Business Bureau (BBB) listings. You should find each lender listed with a grade as well as customer feedback. Do not do business with any lender who has a score less than B. You should probably check online borrower forums. You may find information from other borrowers as to how they where treated by certain lenders.
Consideration Three: Getting the Best
You need to find the loan that fits your financial situation. If you do not want to put your home up as security for the loan, the loan may be a somewhat harder to find, especially for high value -- $10K or more. Your search will be for an unsecured personal loan. If you are putting your house up as collateral, you will be searching for a secured personal loan. Using your house as collateral, loans can easily reach $10K or even more. However, if you default on your loan, the lender can seize your house and sell it to cover the cost of the loan.
Consideration Four: Maybe a Cosigner
If you want to absolutely make such a substantial loan a reality, you could get a cosigner. Perhaps you have a friend, co-worker, or family member who has a steady job with a good income as well as a good credit rating; with a cosigner, your chances of landing a five-figure loan increase greatly. Lenders will be looking at your debt to earnings ratio whether you have a cosigner or not. They want to see that you have enough money left over every month to cover the loan payments. They will check any cosigners as well.
Consideration Five: Diligent Shopping
As noted above, the internet will offer you scores of lenders who are willing to work with bad credit home owners. So many have stepped into the market that you should shop among five to ten lenders. Get quotes and go for the one with the lowest interest rates and the best repayment scheme. When you ask for quotes, tell the lender that you are getting quotes from other lenders. You might want to use one of the free online loan calculators that will help you figure your loan regarding interest rates, fees, and monthly payments.
You Have Your Cash In the Bank
Once you land a loan, please use it wisely. Also, repay this loan under the conditions in the contract you signed. Paying back a large loan like this on time and in the right amount, you will be doing a big favor to your credit history. The next time you need a large loan, the borrowing will be so much easier.