Archive for May, 2010
There is some information online about loans for people with bad credit but much of it is fragmented and unreliable. This provides little help to those suffering with bad credit and needing to borrow funds. For those saying “ I need to borrow through a bad credit loan”, this is provide a more complete assemblage of bad credit lending information.
Finding sources of lenders who loan to bad credit people isn’t usually an issue unless someone’s credit is completely destroyed. The idea of a loan, bad credit or otherwise is generally a simple concept. One borrows money and repays it on a scheduled term. But the variations to some of the lending options for people with bad credit, though settle, can make a big difference to ones final outcome. And there it is frustrating for things to end of differently than one expects. For this, understanding how the pieces of the puzzle can fit together and some of the possible ramifications is the key to ending up with the best strategy or lending product for your situation.
Up to $3000 loans for People with Bad Credit
Not only are there different types of bad credit loans to explore, but also different strategies based on the amount of money one wishes to borrow. If you are looking for $1000 loans for people with bad credit you have a few options. Many of these will depend on the state of your credit and what ultimate ramifications you are will into except. On the more expensive side (if you calculate the charges over the longer term) is the payday loan for people with bad credit. On the plus side they have little to no affect on your credit record (unless you default and they go after you through the courts getting judgment – which would appear on your record). Most if not all payday loans don’t really basis your approval using your credit but rather on your income and income source. What type of income you are receiving: commission, salary, hourly, part-time, full-time, bonuses, business income etc. They also look at how long you have been receiving that amount of income and, in the case of hourly/salary/similar, how long you have been working at the same company/same industry. At a general level they are really only concerned with the probability of you paying them back within a few weeks to a month. The loans amount is usually governed by how much you make in as a given pay period.
On the less attractive side is the cost, in terms of not only interest but also service charges. Depending on the laws in the state you reside they can be really steep (and in some cases these loans are not available at all). But this must be weight with the problem of availability of funds in any given time period and the repercussions of not having the money you need. Using one lending products to fund a vacation is not a great idea. If you can’t pay the money back very quickly and drag it out over a many months or longer that vacation could end up costing you twice what was charged.
Other options for amounts including $2000 loans for people with bad credit include using a subprime lender and an unsecured/personal loan. Also called signature loans, because the loan is secured with only a signature and no collateral. Using a small loan can have a positive effect by helping one re-establish their poor credit by paying back the loan on time and in full. $3000 loans for people with bad credit could fall into this category as well.
If the unsecured type won’t fly then consider a secured loan or getting a cosigner. The use of collateral or a bad credit secured loan is one option as it reduces the risk for the lender by tying up a borrowers assets so they can’t just simply walk away from a loan.
The cosigner is another safeguard that can reduce the risk for the lender and improve your chances of being qualified. The issue with this is if the bad credit lender walks away from the loan the cosigner is stuck “paying the bill”. And if late payments are made (or not at all) it will affect both: the borrow’s and cosigner/co-borrower’s credit file.
Credit cards are another lending option to look at. There are regular credit cards and secure credit cards. Like the secured loan, the secured credit card requires collateral (but usually only cash). Depending on the state of your credit, you may have to pay a deposit of 10-20% of the credit limit on the card to 100%. Unlike traditional loans this is revolving credit which can be used again once it has been freed up by payments.
Always this of this in terms of a balancing of risk and potential profit. Lenders would love to lend out billions of dollars but the balance of all that profit must be weight against the fact that for every 1000 loans, 50 of them will never be paid back in full (as an arbitrary example based on no real numbers). There are entire departments within lending institutions and whole companies too that analyze the numbers and break them down by just about anything. It is very similar to the insurance industry that uses mathematical models to predict how much money they will have to pay out based on age, sex, location etc.
I will be exploring more and adding to this Taxonomy of Loans for people with bad credit.