Loans For Bad Credit Are A Hot Issue

Category: Finance, Credit.

Loans for bad credit are a hot issue. See if this sounds familiar.

As a matter of fact, if you need a bad credit loan, you' ll find available a great deal of information. You need a loan. Or perhaps you' re a first time home buyer and you' re looking for a mortgage. Perhaps you need a home improvement loan, or money for, a car loan college. The problem is, you have a poor credit rating, and you' re not sure you can get a loan. In fact, EVERYONE wants to give you a loan.

But when you look into bad credit loans you find out that, there ARE loans, lo and behold for people with bad credit available! Loans for automobiles, a home, college, or just about anything. Would you ever have thought getting a loan would be so easy with a bad credit rating? And not just loans: credit cards as well. So that's terrific news, right. Ask yourself" Why does everyone want to give me a loan even though I have poor credit? " the answer is simple- - HIGH INTEREST RATES. Let's just stop for a moment.

Sure, getting a loan is no problem. So" What's so bad about the higher interest rate? " you ask. But the high interest will eat you a live. Let's check out some numbers. After some searching you find the car you want for$ 20, 00So you put in a loan application and get a loan with no trouble, but because of your poor credit, you have to pay 20% interest. You need a car loan.

If your loan is for 60 months, your monthly payments will be$ 528 Now if you had had exemplary credit, you may have gotten the 60 month loan at a 10% rate, with monthly payments of$ 429 The bottom line is, but the time you' ve paid off your loan you will have paid an extra$ 6, 2940 you would never have had to pay if you had you gotten the loan at 10% interest. But if you think that's bad, take a look at a home mortgage loan. FOR THE SAME CAR your bad credit loan has cost you$ 6, 296 more! Let's say you want to buy a$ 100, 000 home and you' re able to get a 30 year loan in spite of your bad credit. If your credit had been better, your rate might have been more like 9% . You get a 12% rate, and pay$ 1, 0261 a month. Had your credit been exceptionally good, you might have only had to pay 6% interest and your monthly payment would have been$ 595 The bottom line?

No, this is not a mistake. That bad credit loan will have cost you( over the 30 year term) a staggering$ 154, 4660 MORE than you would have paid had you gotten a loan at the 6% rate. Your lender gets$ 154, 4660 in additional interest payments because you had to pay a higher rate. So why did he charge you the higher rate? That's over 1 � times the cost of the house itself! Because he knows he can get it! Now do you see why people are tripping over themselves to give you a loan in spite of your bad credit?

He knows( and you know) that you need a loan, but because of your bad credit no one's going to give you one at a low interest rate. In fact, credit reporting companies make a fortune selling lenders the names of people who have bad credit. Is there a way out? Those lenders know the rates they can charge them, and that the borrower has no choice buy to pay it. You may be thinking" What choice do I have anyway? Rather than resign yourself to the situation, give some thought to improving your credit. My credit is bad, I need a loan to get a house( or car, or whatever, college education) and there's just nothing I can do about it except find a lender willing to give me a loan at whatever interest rate I can get! " But consider whether you' re looking at the situation from a completely wrong angle.

Now if you just found the house of your dreams, you may be forced to act fast before it's sold to somebody else. Maybe this isn' t what you were think, since you' re looking for a loan, NOT credit repair advice. But if you can wait a couple of months, it's highly likely you can make some major improvement in your credit score and THEN look for a loan. But wouldn' t it be worth it to postpone getting that house or that car if it would save you thousands, or even a, tens of thousands whopping$ 150, 0000 or more over the long haul? It's possible to make big improvements in just a few months, and sometimes in as little as 30 days! If you' re thinking your bad credit history is something you' re just stuck with, or will take forever to repair, think again. It's not that difficult either.

You can hire a" Credit Repair Agency" or you can take the" do it yourself" approach. You basically have 2 options. If you decide to hire an agency, you can easily find one in your phone book or online. Professionals will charge you$ 2, 500 to$ 5, 000 or more to repair your credit. Just look for" credit repair. " However, it won' t be cheap. But compared to the cost of bad credit that's still a bargain.

In spite of their high fees, they won' t do anything for you that you can' t easily do for yourself. But it's a mistake to think you can' t repair your own credit! If you' re able to write and mail a few letters you can repair your own credit. Unfortunately, along with all the good information you' ll find some misinformation as well. If you elect to do it yourself some online research will teach you how. A preferable choice is to find an authoritative book on credit repair and follow the advice therein. First spend a couple of months improving your credit rating.

In conclusion, you should seriously consider postponing your search for a bad credit loan. Then you can stop trying to find a bad credit loan, and begin looking for a GOOD credit loan!