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Your Bad Credit and Personal Loans – Three Effective Tips on Getting Approved

Are you one of many bad credit borrowers in desperate need to get financing for unexpected life matters who do not know where to turn? Do you think that your credit history would prevent you from getting the funding you need? While you will not be able to qualify for best offers on the market, geared towards prime credit borrowers, there are multiple solutions designed for people just like you in form of bad credit loans.

No matter why you ended up with having bad credit: foreclosures, collections, late payments, or even bankruptcy, there are bad credit lenders willing to work with your individual situation to get you approved for a loan. There is a wide array of lenders specializing in just loans for poor credit, being able to work out a deal, custom-tailored for your individual circumstances and needs. Should you have a financial emergency, bad credit lenders are the ones who would be able to loan you money without any hassle, like traditional banks and lenders would.

Get Acquainted With Loan Application Criteria

While most loans for bad credit require a credit check, some do not. No matter whether you are trying to get a bad credit personal loan or a short-term cash advance, general criteria is the same. To become eligible for financing, you need to have the proof of the following:

- Legal age in your state of residency, commonly being 18 years of age.
- Legal status in the U.S., i.e. being a citizen or a resident alien.
- Regular income, no matter whether you are a waged or a salaried employee or a self-employed individual.
- Possession of a valid checking or savings account.

Since most applications are processed electronically, you may need to fax or e-mail scanned images of your Driver License or State ID Card, voided check with your name and address on it, recent utility bill in your name, and supporting income documentation, such as recent paystubs from your employer for W-2 employees or recent bank statements and last year tax return for self-employed. It is always a great idea to have all the information and documentation handy before applying for a loan. Some lenders may request some more additional information from you based on your individual circumstances.

Apply Online

As mentioned earlier, a trip to a lender is not typically required. Most, if not all, lenders feature easy online applications and approvals that save time and money. While most lenders may take 2-3 business days to process and make a decision on your application, some do it the very same day. Your best option is to do a thorough research of lenders online to get as many applications out as possible. This would not only improve your chances of approval, but also would let you choose between offers of competing lenders, thus ensuring the best rates and terms on your next bad credit personal loan.

Make Your Application Look Realistic

It is important to only apply for the loans you truly need. Many bad credit borrowers make a mistake of making large loan applications that they are simply not able to afford. Remember: lenders typically endorse smaller loan amounts and shorter terms for bad credit loans. Therefore, unless you are willing to pledge your property as collateral, have realistic expectations of what you may get.

How To Apply For A Personal Loan

Personal loans are loans granted to a person by a financial lending institution. The repayment of the loan is agreed upon by the lender and recipient upon approval of the loan. These loans are different than vehicle or home loans because the amount borrowed is generally much lower. When applying for a personal loan, the financial institution will look into several different factors to decide if a person qualifies. The lender will considers a persons credit score, unsecured debt, current bills, income, and how much the asking amount is for.

A persons credit score is a number lenders will use for any loan. This number fluctuates when businesses report the repayment status of financial obligations. Medical bills, credit cards, living expenses, and other bills a person may have will report to the credit score. When a person repays on time without any delinquencies or if they are delinquent on payment it will reflect. If a person files bankruptcy, it will reflect in the credit score report. The lending institutions generally require the credit score to be a certain number before they even consider a loan granted. The credit score will also determine if the person needs a cosigner for the loan.

Unsecured debt is any debt with a fluctuating interest rate. This could qualify as credit cards or balloon payments on a vehicle or house loan. Unsecured debts are a dangerous factor in the equation because they are at risk of getting out of control and could prevent the lender from receiving their monthly payment. Before applying for a personal loan, it is best to minimize as much unsecured debt as possible. When the debt is minimized it will increase your credit score and reduce a persons monthly budget giving them a better chance of being approved for the loan requested.

Lender’s take into consideration a persons current living expenses. These living expenses include monthly rent or house payment, utilities, food, vehicle payment, insurance, and gas. All of these expenses are required to live on a daily basis. The lender will take into consideration if there is roommates or if the person pays the entirety. Lender’s also prefer to see these expenses combined leave the person with a certain percentage of your income free to ensure the loan repayment will be done successfully. If the living expenses are a majority of the income, it is best the borrower try and find a supplemental job to offset the formula the lender uses to determine if they qualify for a loan.

A person must bring proof of income when applying for a loan. Generally the lender will request a minimum of three months proof. The lender will consider the longevity at the employment position, how much a person makes hourly or salary, and if there are any court ordered garnishments taken out of the checks. The lender will calculate your income into the equation and also take into consideration if a person already has some money in the bank. The lender likes to a there is some money saved up for emergencies. With a saving account built up there is a less likely chance of a person defaulting on the loan.

Once the information is presented to the lender it will be sent over to the underwriter’s department to make the final determination if the person qualifies. If needed, the underwriter’s will then request any additional information. Upon approval is when the person will sign the financial contract with the lender and the money is received. At anytime during the signing process and after the borrower is welcome to call the financial institution if they have questions.

Personal Loans for the Unemployed, No Stigma Attached

Just because you are unemployed, does not mean you have to carry it around as if it is some sort of punishment. In the downward spiraling of the economy of today, millions of folks are unemployed basically because there is just no work to do. That is one of the many down sides of a bad economy. In fact, nowadays folks can even contract personal loans for the unemployed.

Understanding Personal Loans for the Unemployed

Of course, any personal loan for the unemployed is going to have a higher than average interest rate. These higher interest rates are charged ostensibly to cover the risk associated with lending to an unemployed person. There are some deals you can go do bring these rates down. These deals will depend on your financial circumstances including your employment prospects and your preference as to what kind of loan you want to take.

A Personal Loan for the Unemployed Can be Unsecured

If you have no collateral you must avail yourself of an unsecured loan. Collateral is usually real estate, stocks and bonds, estate grade jewelry, even a late model car. Some folks have collateral but do not want to risk it because of the rough economy. The loan amounts for these tend to be rather low and the interest rates rather high. Amounts can range from $5,000 to $25,000. Repayment terms are shorter as well. The loans can mature anywhere from five to twenty-five years.

A Personal Loan for the Unemployed Can be Secured

If you do have collateral and you want to use it to secure your loan, you will have a number of advantages. One of them would be a lender willing to discuss different interest rate and repayment deals. You will also be allowed longer repayment time and be granted a larger loan than if unsecured. Loan amounts can range from $5,000 to $75,000. Repayment terms can range from five to twenty-five years. The term is calculated from the first payment day, and you can work payments out to fall on the middle or last of each month, or possibly some other date arrangement.

If a Job Has Been Promised

If you can prove to your lender, by whatever truthful means, that you have a job waiting for you within a certain amount of time, you will boost your chances of landing a personal loan for the unemployed. You will be able to get repayment terms and interest rates that range somewhere between those for secured and unsecured loans. If you secure your loan with valuable collateral and have a job waiting for you within a certain time, your lender will probably bend over backward to accommodate you with good interest rates and comfortable repayment terms for you personal loan.

Finding a Lender

If you need to find a personal loan for the unemployed, your best bet would be to go shopping on the internet. Punch you browser with the key term Personal Loan. You will quickly see scores of lenders who may be willing to lend to you. You will also find brokers who will take your financial information and then supply you with any number of actual bids from lenders. You can pick and choose among them to get the best interest rates and the easiest repayment terms – easy on your pocket book.

Verify Your Lender

Before you sign anything, check the reputation of your prospective lender. You can do this online as well by checking the Better Business Bureau listings. You can also enter public forums that have to do with personal finance and see what kind of experience other borrowers have had with the lender. Make sure any web page where you divulge information is secure.