Bad credit loans are probably the only loan for debt consolidation you can get if you have poor credit. For conventional lenders such as banks, a bad credit history always means rejections. They often refuse to lend their money to you even when they know the cause is factors that you cannot control such as job loss or serious illness.
Fortunately, there are lenders that offer loans for people with less than perfect credit. You can get a loan even with bad credit and you can use the loans to consolidate your credit card debt and further improve your financial standing. You can also get the loan to purchase a new or used car or even buy a new or used house.
Secured and Unsecured Bad Credit Loans
There are special lending institutions or lenders that provide loans to fulfill the needs of people who have bad credit scores. Bad credit mortgage loans, bad credit auto loans, bad credit payday loans, bad credit student loans and bad credit personal loans are among popular types of loans for people with bad credit.
Based on the security provided by borrowers the loans come in secured and unsecured loans. If you apply for a secured loan you would need to put up a house or another asset as collateral. The interest rate is lower than that of an unsecured loan but you could lose your property if you don’t make payments on time or even fail to repay the loan.
Consumers prefer unsecured bad credit loans to the secured ones because they don’t have to secure the loans with their property or other assets as collateral. But the unsecured loans are expensive. Because lenders bear greater risk with an unsecured loan than that of a secured loan, they would put more stringent requirements on you and charge a higher rate of interest.
Bad Credit Mortgage Loans and Mortgage Refinance
If you are a home owner you can raise funds from your home equity or mortgage refinance. This also applies when you have bad credit. The difference is the sub-prime second mortgage loan comes in with higher interest rates than a “normal” mortgage loan.
There are bad credit mortgage loans secured by properties like home. You can get a bad credit mortgage loan to consolidate all your debts and lower your monthly payments. And while you pay off your debt you’re also improving your credit.
If you want to refinance your mortgage timing for applying a loan is key for you to enjoy a significant savings. Make sure you watch the trends in refinance lending and compare the rate with your current interest charges. Only refinance your mortgage when the interest rate is much lower than when you took the first mortgage loan and with a reputable company.
Apply for Bad Credit Loans Online
Applying for a poor credit loan online is fast and convenience. Many online lenders offer “guaranteed approval within minutes”. As there are many loan scams however, be careful when picking a lender. Rushing into any loan you’re approved of without comparison shopping is a serious mistake that could lead you to a loan with high fees and outrageous interest rate.
You will need to research different lenders you are considering. With a list of lenders who have loans for those with bad credit go to consumer review sites to find out the experiences other consumers with these lenders. Also, type in “lender’s name + complaints” or other issues such as repayment penalties or grace periods in Google to learn more about the sub-prime lender.
Once you have the answers to your questions it is time to apply for one of the bad credit loans you have researched. Remember to keep an eye on the fees and terms while finding the best possible loan that your situation qualifies you to receive. This way helps you know exactly what you are signing up for.