Loans With Poor Credit

The opportunities for people with poor credit to obtain loans are not what they used to be. Many finance companies that specialized in providing loans to people with poor credit have either gone out of business or have been bought out by larger companies that have stricter lending guidelines. The alternatives for people with bad credit to get the emergency funds they need have greatly decreased over the last several years, but there are still some possibilities that may be able to provide these funds when they are needed.

One type of loan for poor credit consumers is a mortgage or home equity loan. This is not a valid option for many people with poor credit because you have to own your home. In the event you are a homeowner with poor credit, there are still other factors that will come into play when applying for this type of loan. First and foremost is the amount of equity in the home. While people with good credit may qualify to get a loan for 80 percent or more of the value of the home, people applying for these kinds of loans with poor credit will likely only be approved for an amount that will be less than or equal to 70 percent of the value of the home. Another factor that will be affected by someone applying for these kinds of loans with poor credit is the interest rate. Rates will be much higher for equity or mortgage loan consumers with poor credit than those with good credit, but this is a possibility for obtaining the money needed for people with less than perfect credit.

There are still personal loans available for people with poor credit, but the probability of them getting an unsecured loan is not likely. Most people applying for loans with poor credit will likely have to have some kind of security as collateral for the loan. This means a car title or boat title or some kind of personal property that will be worth more than the amount of the loan will have to be pledged as security for the loan. These loans usually have very high interest rates, but they can be a valid option in getting the loan that is needed.

One type of loan for poor credit consumers that is easy to qualify for is what is known as a payday or cash advance loan. These types of loans are offered either through a branch office or online and are accessible to people with all types of credit. This is because the loan is based on your job and the paycheck you will receive. Money can be borrowed by simply filling out an application online and providing checking account information as well as employment information. Upon approval funds will be disbursed to your account, usually within 24 hours, and then will be paid back by an automatic debit from your checking account. There are no credit checks or collateral required for the loan, and if the loan can’t be paid back in one payment the lender will accept installment payments for a fee. While these fees could add up over time, this is one loan for poor credit consumers that is quick and easy to obtain as long as you are working.

Obtaining loans with poor credit is not as easy as it used to be, but knowing what the alternatives are can help you figure out what the best option might be for your situation.