How to Apply for Bad Credit Secured Loans
Almost everyone, at some point in time has a need for a little extra money in the form of a loan. Whether the money is needed to pay off debts, buy a home, purchase a car, or even to start a business, it can be hard to obtain a loan with a bad credit score. However, it is not impossible and there are ways in which a person can obtain bad credit personal loans, bad credit title loans, or even bankruptcy secured loans. Unfortunately, a person with a bad credit score will normally incur much higher interest rates on whatever amount of money borrowed. For this reason it is important for someone dealing with credit issues to determine whether or not getting into a loan will be a good choice for them. In some situations it cannot be helped and a loan must be taken. Following are a few suggestions on how to get a loan with bad credit.
Bad Credit Consolidation Loans
If the reason a person is looking for a loan is to get out from under a mountain of debt, a bad credit consolidation loan may be helpful. There are many companies that offer these loans and can help a person consolidate all outstanding loans into just one loan. The interest rate on a loan such as this will vary, however, in many cases the company can help a person negotiate a much lower interest rate on the new loan which will wind up saving a good amount of money, while paying off debts. To apply for one of these loans the first thing a person will need to do is locate a lender who specializes in these types of loans. Once a lender has been found the application process will begin and the lender will specify exactly what documentation and other proof they need.
Use Collateral as Security
While it is risky to put a house or other high valued item up in order to get a loan, it can help reduce interest rates by quite a bit. Most financial institutions will be much more willing to loan a higher amount of money, at lower interest rates, if there is something they can hold which is equal or greater in value than the amount of money being requested. This is because the lender feels confident that even if a person should default on a loan, they will be able to get the money they have loaned back by taking possession of the item used for collateral. If there is no collateral available there are still other avenues a person trying to obtain a loan may use.
Ask Someone to Co-Sign
Many lenders will not even consider giving someone a home loan if their overall credit score is too low, or inadequate due to a lack of credit history. In some cases, lenders will offer extremely high interest rate loans to people with poor credit. In order to avoid being declined for a loan, or offered a loan that carries astronomical interest rates, a better solution is to ask someone to co-sign on the loan. This is a great way to find cheap personal loans or home loans. The person co-signing should have excellent credit and be willing to hold responsibility for the loan, should the person obtaining to money ever default. A good co-signer is often all the security a lender will need.
There are many financing options for people with poor or bad credit. Today there are even bad credit secured credit cards, which can be obtained quite easily. Often times these credit cards will assist a person in building up a good credit history by reporting all payments to the three credit bureaus. In any loan whether it is secured by a co-signer, or collateral, prompt payments will always result in good points on the over all credit score.