Low Credit Score - Tips for Getting a Loan with a Credit Score Below 550
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Posted On :
Jan-09-2012
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Article Word Count :
521
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Under the current economic scenario a majority of people feel it is not possible to get loans for bad credit. However, they are mistaken. In fact, because of credit crunch a few new types of loans have been introduced, this has made it possible for people with bad credit to still make arrangements for finance.
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Under the current economic scenario a majority of people feel it is not possible to get loans for bad credit. However, they are mistaken. In fact, because of credit crunch a few new types of loans have been introduced, this has made it possible for people with bad credit to still make arrangements for finance. This article throws light on the various options available to borrowers. Choose the one best suited for your condition.
Secured loans
For secured loans lenders require collateral of some kind for pledging. It could be a house, a shop, a car, jewelry, shares, an insurance policy, fixed deposits or anything else that is valuable. When the lender has added security and is assured of getting his money back they provide the loan amount willingly even if the credit score is not remarkably good. Unlike other bad credit loans, secured loans for bad credit are available even for large amount of money at lower rate of interests. Lenders are willing to offer anything from 5,000 pounds to 75,000 pounds provided you have the capacity to repay it and have enough equity with you. The repayment period of such loans is longer with a duration period of even 25 years.
Unsecured loans
Unsecured loans are comparatively new. These loans became increasingly popular after the credit crisis hit the finance market. The lenders do not insist on a credit search of the applicant. In other words, unless the applicant is a registered bankrupt, loans can be arranged irrespective of what your credit record is. Such types of loans however insist that a guarantor guarantees the repayment of the lenders, just in case they are unable to do so. The chosen guarantor must be a homeowner with good credit ratings and with an income of 800 pounds a month. A borrower can apply for loan amounts ranging between 50o pounds to 5000 pounds. However, some lenders will not permit the borrower to borrow more than 3000 pounds initially. Nevertheless they will increase the loan amount after you have made your payments on a regular basis for about 6 months. Repayment of loans is usually spread over 12 to 60 months; however this depends on the amount of loan you have borrowed. The rate of interest charged on unsecured loans for bad credit is considerably higher than that of secured loans.
Logbook Loans
A logbook loan which is also known as V5 loans is a secured type of loan. However, instead of the house, the loan is secured on the car logbook. It can be organized even without credit check. Amount even up to 50,000 pounds can be organized provided your car is equally valuable. So regardless of your credit history, as long as your car is finance free and you manage to repay the amount, you will have no problem in making arrangements for logbook loans. Since the logbook car will be with the lender till the loan is repaid in full, the lenders feels pretty safe. The rate of interest on such loans is quite high.
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Article Source :
http://www.articleseen.com/Article_Low Credit Score - Tips for Getting a Loan with a Credit Score Below 550_130927.aspx
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Author Resource :
Mike John is a well known Financial Consultant. He provide useful advice through his articles on Bad Credit Loans, Unsecured Loans and Same Day Loans.
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Keywords :
Bad credit loans, loans for bad credit, poor credit loans,
Category :
Finance
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Loans
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