Bad Credit Loan Options
If you have a bad credit history and you think that lenders will view you as a high-risk borrower, you’re absolutely right. But if you think your only option is getting a bad credit loan with high interest rates, the good news is that you’re mistaken.
A good credit score can open a world of opportunity since it enables you to get a loan without difficulty. You will likely be approved and receive favorable interest rates for being a low-risk borrower. That is your reward for displaying good behavior in resolving your debts and maintaining a good debt-to-income ratio.
If you don’t have stellar credit, you still have the chance to receive financial assistance. Although it will most likely be coupled with strict payment terms, long waits for approvals, high interest rates, various fees, and high penalty charges.
Most people will eventually need to take out a loan. If your credit can use improvement, you stand a better chance of approval with certain types of loans. Most of these lenders will not take into account your bad credit score. However, they will find other means to protect themselves since they consider your chances of defaulting greater than someone with good credit.
Secured Loans
Secured loans require some type of collateral as a condition for borrowing. The most popular type is a home equity loan, which allows you to borrow up to the current worth of your property minus any existing mortgage. To secure a loan, you put up your home, car, or any other valuable asset.
This gives the lender the right to take possession should you fail to make your payments. If you have an asset of high value, you could borrow a large amount since the lender is required to level it with the value of the collateral you are offering. You can receive a lower interest rate with a secured loan since the collateral lowers the risk to the lender. Of course, there is risk in losing that valuable asset if you can’t repay the loan in a timely manner.
Unsecured Loans
Secured loans require some type of collateral as a condition for borrowing. The most popular type is a home equity loan, which allows you to borrow up to the current worth of your property minus any existing mortgage. To secure a loan, you put up your home, car, or any other valuable asset.
This gives the lender the right to take possession should you fail to make your payments. If you have an asset of high value, you could borrow a large amount since the lender is required to level it with the value of the collateral you are offering. You can receive a lower interest rate with a secured loan since the collateral lowers the risk to the lender. Of course, there is risk in losing that valuable asset if you can’t repay the loan in a timely manner.
Payday Loans
This type of loan is likely the most dangerous since it can really bury you in debt. You should only opt for it if you are positive that you will be receiving enough money in the next couple of days to pay it back.
It is characterized by its short payment term (you are typically required to pay in a couple of weeks or months) and the high interest. If you are unable to pay within the due date, your debt will continue to accumulate at an alarming rate. The annual interest rate can reach up to 400% of the original loan amount.
A 400% APR means that for every dollar you borrow, you will have to repay four dollars. Try to always avoid getting a Payday loan.
Credit Card Loans
If you haven’t maxed out your credit card yet, you can opt to get a credit card or cash advance loan. The amount you take out will be included in your monthly bill and charge your current credit card interest rate.
All credit card loans are pre-approved and unsecured. You don’t need to submit any documents or collateral to receive one. All that’s required is a good repayment and credit history with the issuer.
While there are many issues that might be hurting your finances, debt settlement could be the solution. Not only does it help you resolve your debt, but you can be on your way to a fresh start in as little as 24-48 months.
Debt settlement is based on the premise that creditors may accept a lower amount rather than risk the chance of receiving nothing at all.
High Success Rate
Consumers who enroll in debt settlement programs reduced their debt on average by 33%, according to Supermoney. And that’s when fees are taken into account.
According to a statistical review prepared by Hemming Morse LLP on behalf of the American Fair Credit Council (AFCC), 98% of clients saved money after fees. Please note that debt settlement firms are not allowed to charge for their work until they settle an account. In most cases, the savings for consumers exceed the fees charged by firms. But please note that debt settlement may have further negative impact on your creditworthiness.
Lower Your Risk
When you choose debt settlement to resolve your unsecured debt, you will never be asked to put something up as collateral. You also avoid tossing money out the window with high interest loans. National Debt Relief will never charge a fee until an account is settled. And we will support you every step of the way.
A better question might be if you should use your credit cards. Whether you can charge purchases after debt consolidation depends upon the repayment option you choose. If you opt to participate in a debt settlement program, you will likely close all your credit card accounts and thus be unable to continue using them.
On the other hand, you will retain control of your credit cards if you obtain a debt consolidation loan. However, since the purpose of the loan is to pay off those balances and become debt-free, continuing to spend with them could be counterproductive.
If you’re considering a debt consolidation program, you might want to speak with a trusted financial advisor first. They may be able to point you in the direction of a nearby reputable debt consolidation program or a credit counselor that can help you solve your financial challenges.
Another option is working with a debt settlement company like National Debt Relief. Instead of trying to figure everything out yourself, they will actively negotiate with creditors on your behalf to lower your balances. Be sure to review your finances before deciding which program is right for you.
If you are convinced that a debt consolidation program is your best option, select an established name to work on your behalf. Working with a company that has a current working relationship with creditors and collection agencies will help you get better results.
Look into their success stories to see what they are capable of accomplishing. But try not to get your hopes up depending on those results alone. Each situation is unique and what works for one person might not be the best strategy for you.
Stay away from companies that charge upfront fees, it is unethical and illegal. The government prohibits this under the debt relief laws – specifically the TSR or Telemarketing Sales Rule. You need to be very careful in choosing the right company or you might end up having to pay far more than you owe. Know your rights and what to expect before choosing who to work with.
If you wish to speak with a debt professional, contact National Debt Relief. We always work within the guidelines and put your best interest first. At the very least, we can advise you on the ideal path to take depending on your financial capabilities.
After you give us a call or fill out the short form on this page, we will have someone get in touch with you. The initial consultation is free, and we will never ask for upfront fees. We also don’t get paid until you agree to a negotiated amount and the account is settled.
Something really exciting happens after people have their first phone call with us.
They start to feel the power of taking back control of their personal and professional life.
Pay Off Your Debt
- Discover How Much You Could Save
- See How Quickly You Can Take Back Your Life
- Never Pay A Fee Until An Account Is Settled