Archive for April, 2010
Looking for lending products like $5000 dollar and up loans for people with bad credit is something that should be approached with one’s mental faculties intact. While many use the adage “learning from one’s mistakes to their advantage: in the case of bad credit loans a mistake is often too costly. Be arming yourself with the proper tools and tips before hand to get a “lay of the land” will reduce the chances of failing pray to the many pitfalls.
While the bad credit lending industry has received a bad rap – the truth of the matter is it is an important part of the lending world. Without access to loans people with bad credit would have few places to turn in order to access the money they need. The bad credit loan industry also provides a way for people to rebuild their credit be taking a more costly loan but making on-time payments, which is usually reported back to the credit bureaus.
There is often a misconception of the poor credit loan industry as well. Truth be told: a large majority of people with poor credit have earned it through not making payments on time or at all. This increased risk to the lender must be balanced out or they wouldn’t be in business for long. However, there have been lending companies that have engaged in predatory lending practices that make it next to impossible for a borrower to ever payback a poor credit loan in their life time. Unfair practices include things like charging a reasonably high interest rate, added extremely high late payment charges and added unusually high additional charges like NSF check penalties.
Be aware of what you are signing and ask for clarification in the fine print. By factoring in all the possible charges in your lending decision you will save yourself a bundle. If the lender will not explain things fully or the document’s fine print is so difficult to read you need to be a lawyer to understand it, then ask yourself if this is the right situation for you.
Many lenders will give you an idea of the cost of borrowing, even if it is over a 5 year period. The projection will show you each future payment that will be due and break it down into the principal (money being paid back) and the interest (the cost of borrowing the money). This will really help a potential borrower have a better idea for budgeting as well as the real cost of borrowing the money in the first place.
If you are looking into a cash advance or a fast cash loan, really be careful with the terms within those agreements. Those will generally come with a very high interest rate and the full effects will be felt if one cannot pay it back within a very short period of time. $5000 payday loans a very unusual as these types of loans are based (usually) on what one makes. They basically give you your paycheck early and are meant to be paid back in full once your regular pay check it received. Unfortunately many have been stuck and had to try to carry one of these loans and this is not where you want to be.
$5000 secured loans with bad credit are lending products that are tied to some sort of collateral. Things like homes (which are often for large lending amounts) or cars. Some use household goods, but these types of loans will come with a higher interest rate. The rule of thumb is the easier it is for a borrower to walk away and default on a credit obligation the higher the risk to the lender and the higher the interest rate will be. It is less likely for a borrower to default on a loan tied to their home than some furniture they were going to replace anyway.
Looking at $5000 bad credit unsecured loans (sometimes referred to as bad credit signature loans, personal bad credit loans or unsecured bank loans for bad credit) is another avenue to consider. These types of loans have no security or collateral and rely of the creditworthiness of the borrower. With bad credit it will be more difficult to qualify for one of these loans. However, using a cosigner will often greatly improve the chance of qualification. It is common practice for the loan decision to be based on the cosigner exclusively and the bad credit borrower to bad added for contractual reasons, legally binding them to the loan. Besides the benefit of getting the money they need – all the credit reporting will be recorded on their credit history. Since a credit history is always changing, the on time payments will start to improve their credit within a short time. And over time they should begin to reap the rewards.
Whether one is looking for 5000 dollar bad credit unsecured loans or $5000 secured loans for bad credit: it helps to understand the terminology and have a general idea of how things work. Having a weak borrower’s profile is hard enough without having to worry about the creditability of the deal you may be signing. Consider having a trusted unbiased friend/relative/professional look over the agreement before committing. Always remember that $5000 dollar and up loans for people with bad credit can work in the right situations but not in all of them.