Bad Credit Loans Guaranteed Approval

Posts Tagged ‘bad credit personal loans’

Almost everyone at some point in their lives find themselves in financial jam, where they need some fast cash but are having trouble getting approved because of their bad credit. This is were we are prevented with a bit of a credit paradox. The paradox being that those who have the most trouble managing their finances, are the ones who can benefit from a loan the most, but can not find any guaranteed approval loans because of their credit score. This problem does have a solution however, this is where high risk lenders come in. These lenders specialize in providing high risk loans.

What is a High Risk Loan?

A high risk loan is typically defined by two factors; the applicant having sub-prime credit, and the lack of collateral. Sub-prime refers to anyone hos has falls below the fair credit score range, typically a credit score of less than 650.  Most lenders consider anyone within that credit score range to be a severe to moderate risk, but what makes these loans stand out is the lack of collateral. This means the lender does not have any property to hold against the value of the loan, and they have nothing to collect or sell in the event the loan defaults. With bad credit auto loans, the lenders are able to take back the car to help cover the loss.

These types of loans tend to be for lower amounts, the loans are usually around $1500, but can be much smaller. These loans also carry huge interest rates because of the risk the lender is taking, interest rates of around 30-40% are not unheard of.

Types of High Risk Loans

Online Payday Loans – These loans are the most common high risk loan, they are great way to help navigate life’s unexpected expenses. Be warned, while you can often walk away with $1500 cash in hand, or wired immediately to your account, you will often need to repay the loan in full plus interest by your next paycheck. There are plenty of payday advance lenders online and most check cashing places also offer this service if you are not comfortable with an online loan.

Bad Credit Personal Loans – These loans are pretty rare, and finding lenders who even offer them is difficult. These loans are essentially general personal loans with no collateral. They are not easy to get even with good credit, because the bank doesn’t own anything in the event the loan terms are broken. An example of this would be a loan for $3000 to buy new furniture for a new apartment or house. There are a few places online who offer this type of loan, you best bet would be with your bank, especially if you have direct deposit an have banked with them a while, they would be more likely to extend a personal line of credit for you.

Bad Credit Mortgage Loans – Mortgage loans used to be the most common type of bad credit loans out there. They came second to only to bad credit car loans, but they are far less common due to the current housing market. When the market was in its prime, banks would approve almost anyone for a mortgage. Housing costs were constantly rising during that time and banks would actually make money from you foreclosing on your home. These days they are much more difficult due to decreasing home values, and would require a substantial down payment.