Bad Credit Loans – Four Tips About Getting Finance
People can acquire a bad credit history for all sorts of reasons which lead them to seek bad credit loans. It may be due to a sudden financial loss, a lack of evidence to show support of their work or income, or national events such as a housing bubble, which may leave many of those already owning homes, owing more than the value of their property.
Tip 1: Getting Bad Credit Loans
Regardless of how you got there, bad credit can make it very difficult to get a loan and you’ll therefore have to start to research loans specifically designed for those with bad credit. Compare loans from as many institutions as possible so that you can be absolutely sure to get the lowest rate of interest possible.
Never sign any agreements until you’ve checked out all of the options for bad credit loans despite the fact that it can tempting to rush into one and gain quick access to money.
Tip 2: A little help from your friends
Although it depends on your status, it could be worth appealing to family and friends for help with a loan. If you decide to do this, it’s important to approach it in a business like manner and to legally document and record anything borrowed.
You’ll need to create a written agreement including information regarding the interest rate, payment terms and what will happen if you fail to repay the debt.
Tip 3: Look further afield for a co-signer
Some people may not be lucky enough to have family and friends with extra cash to loan therefore you may want to consider a cosigner – a person who has good credit who would be willing to co-sign a loan.
This could be someone who is familiar with your situation and is confident that you will be able to repay the debt – however many people may be wary of co-signing as they will be liable for any defaults that you make on the loan which could affect their credit history.
Tip 4: Home Equity as an option
If you’re lucky enough to already own a property yet have bad credit, you could get a low interest, tax deductible line of credit by tapping into your home equity. Just be careful however as this could put your property at risk if you’re unable to repay the debt you’ll create.