personal loan

Bad Debts: They don’t have to be a “dead” end

Anyone who is the parent of a teenager will tell you that teenagers challenge their parents by providing a lot of surpises. They particularly like to surprise their parents with large, sudden, and expensive things that they simply must have, right now.

Something similar happened to a friend of mine a little while ago, so I thought I would share how they got themselves out of this particular jam with a little ingenuity and an internet search.5025164562_6af1ac753c_n

The Surprise School Trip

Remember when your kids were little and they would tell you everything about their day when they came home from school? They just could not contain themselves, and they simply had to tell you everything immediately.

Apparently, sometime around high school, that stops happening. At least, that’s how it happened for my friend, Barney, and his fifteen-year-old, Madison.

Usually, when Maddy forgot to tell her dad about something school related, it meant a late night in the garage creating a science project or last minute purchases. This time, however, she’d forgotten to share that she needed over a thousand dollars for a major school trip. That kind of money is something that most of us just don’t have lying around, and of course, like any teenage girl, it was a matter of life and death.

Recovering from Bad Debts

To add to Barney’s woes, he has been recovering from some bad debts that he incurred (through no fault of his own) during the recession, and while he’s got some credit, he hasn’t quite reached the point where he can walk into a bank and walk out with a personal loan.

Barney was in a panic, and he mentioned it to me. Fortunately, I’d seen a flyer for a Miami auto title loan a couple of days before, and knowing how important it was to him to make sure Maddy went on her trip, I suggested he apply online.

At first, he felt hesitant, worried about his credit rating and all kinds of other things, but as any dad with a not so little princess will tell you, he was willing to look into any option that would make his little girl happy.

Quick, Easy, and a Happy Ending

Luckily for Barney, one of the things he had managed to do since he started his financial recovery is buy a new car, and thanks to the title loan he got, he was able to get the cash he needed for Maddy’s trip, and still continue to drive his car, just like he had all along.

He only has a few more payments left to make on the loan, but thanks to this creative financing solution, everyone wins. More importantly, Madison still thinks that her dad is the best!

Can You Get A Personal Loan With An Imperfect Credit Score?

Personal loan detailsHad it been a few years back, the answer would have been ‘No’. This is because, with a collapsed financial market in the forefront, no lender was ready to bear the risks of providing loans to people with bad credit scores. But things have changed today. With the market picking up pace at a slow yet steady pace, new-age lenders have now got a whole new range of loans for people with bad credit also. So are they overlooking the risks? Not really, since the higher interest rates are primarily charged to play down the perils involved in the niche, but by and large, they focus more on the needs of the people.

The answer therefore is an ‘Yes’ today, which means that even if your credit score is below average and/or not ‘perfect’ you can get a loan. A specific type of loan called bad credit loans, meant for people having imperfect credit scores have been formulated by certain lenders so that patrons with ‘below average’ or ‘bad’ credit scores are not entirely deprived of credit.

Why are lenders ready to provide ‘bad credit’ holders loans?

When lenders fork out loans to people, they are truly much concerned about the ‘risks’ involved in the offering…which obviously are more when the borrower is having bad credit. But yet still, they are not disinclined to the situation these days since they have found out that many of these people are dependable borrowers, who are just victims of job loss, financial loss or adverse monetary circumstances.  They also feel that this group deserves a chance to reinstate their credit scores by taking a loan, and also procure financial support as and when they need it.

In fact in many instances they have seen that these loan takers are more eager to adhere to stipulated repayment schedules as they are more ardent to rebuild their credit glory once more.

Who provides them?

Loans for people with bad credit are available with loan matching portals that have got bad credit loan programs on their portfolio, and has included in their list niche segment loan providers who specialize in the forte. Such a portal connects a prospective borrower to a suitable lender when the former fills up a form at the website (that explicates his/her loan requirements) and answers certain follow-up questions. For eligible candidates, loan approval takes a minute. It’s a smooth sail and nothing complicated. Rates and loan options can be checked, reviewed and compared by applicants for picking out the best offer.

Interest and repayment terms

Interest for bad credit loans are higher than what is charged for standard loans in the market, but not to the extent of being unaffordable. The key is to choose the right amount and the right tenure, as when a loan is affordable in terms of reimbursement and term, there are less chances of defaulting on its payments. Timely refund rather helps to lift up the credit scores of a bad credit borrower yet again and improve his creditworthiness for future loans.

Too low a credit score might however need rebuilding before you can apply for a loan.

Claudia Martinez is an expert content writer who writes for several blogs and websites including finance blogs.

Things You Must Know before Applying for a Personal Loan

Things You Must Know before Applying for a Personal Loan

Planning to buy your son a new Mac book on his 18th birthday? Thinking of gifting dear wife an expensive solitaire this anniversary? It is these little moments and fulfillment of the dearest desires that make life worth living. But the money issue can ruin these little moments. Don’t let finances spoil your dream moments. Wondering what to do? Well, the lenders are ready with personal loans. Yes, you can apply for such a loan to fulfill the most private ambitions you have.

Why is it advantageous?

An example would make it much easy to understand. For instance, education loan – you know how cumbersome is the whole process of getting the same sanctioned. Numerous forms have to be filled up, too many documents to be produced. You also have to provide suitable collateral; in a nutshell, too many things to be done before you get the cash in hand.

Actually, even the lenders can’t help it. In most cases, the amount involved is so huge that without checking and cross checking your ability to repay, the lender won’t sanction the loan. In sharp contrast, personal loan amounts are usually moderate. Hence a scrutiny of the borrowers’ credit record is good enough for the lender.

Who offers a personal loan?

When you’re contemplating applying for a personal loan, there is no shortage of lenders. Most, if not many offer such loans, in fact there are a good number of schemes that you can choose from. What is perhaps even more convenient is that there is the option of online application. In case of online cash loans, verification is done over the phone and the relevant documents have to faxed, of course you have to fill up an online application form to begin the entire process.

However, it is suggested that you approach a lender who knows you well, that is you have an existing or a past relationship with the latter. Such a lender would know your credit history as well as you do and the lender would know whether or not you’re reliable as far as repayment is concerned. A pre-existing relationship improves the chances of approval. Besides, there is the scope to further improve the bonding by on time payment of interests and other dues.

Which points a lender considers?

What is that the lender looks at? The answer would be your income status. This is the first and foremost document to be scrutinized. Credit score is also important to some extent, though, not mandatory.

Usually no security or collateral is needed and so personal loans are often referred to as unsecured loans. This is not same as like short term loan.

The lending institutions look at a couple of other things and those are,

  • Your source of income, how stable the source is. It is preferred that you stick on to a job for a good period of time before applying for the loan.
  • Another thing that is scrutinized thoroughly is how much and what assets you own.

Undoubtedly the entire arrangement is really convenient. If you have a steady source of income and at least a moderate credit score, then you’re very likely to be eligible for short-term personal loans. However, such a loan is expensive – the interest rates charged are pretty high. Therefore, apply for one only when it is absolutely urgent.

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