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Personal Loans: The easiest solution even with Bad Credit
If you are in need of money but you dont want to undertake any complex financial transaction, personal loans are the right option for you. Personal loans are designed to provide money for applicants with little requirements and very flexible repayment processes.
Secured or Unsecured
Personal loans come in two forms: Secured and unsecured personal loans. Secured loans are guaranteed by the client with a personal asset such as a real estate or a vehicle. Unsecured loans on the other side dont require any collateral. But, though you may say this is the only difference between the two kinds of loans, the truth is that this difference has many consequences.
Secured loans involve less risk for the lender and this turns into lower interest rates, longer repayment periods and lower monthly payments. As opposed, unsecured loans imply higher risks for the lending institution and thus carry higher interest rates, shorter repayment periods and higher monthly payments.
Get Your Credit Report
Knowing your credit report before applying for a loan is essential. Credit agencies are required to provide you with a free copy of your credit report as per your request, so dont waste this opportunity.
Demand your free copy and make sure there are no errors or inaccuracies and if you find something that needs to be corrected, act immediately and contact the credit agency. Credit Agencies are prepared to deal with this kind of problems and are required by law to attend at your request for revisions.
Bad Credit is not an obstacle
If you suddenly discover that past financial mistakes have shattered your credit score, you dont need to worry. There are many people in the same situation and the financial industry, as creative as it is, has shaped solutions for people with bad credit, no credit at all or even for those who have gone through bankruptcy.
There are many lenders now offering personal loans for people with bad credit, the conditions are not as good as regular loans but they are a good way to rebuild your credit and a better source of finance than credit cards. The interest rate on credit cards is usually 50% higher than bad credit personal loans and the monthly payments of a personal loan are usually fixed so you wont have to worry about sudden variations.
Make sure you use the money to cancel outstanding debts and credit cards balances in order to immediately improve your credit score. If you do so, further monthly payments on the new loan will contribute to enhance your credit till youll finally leave the bad credit category and enjoy the benefits of having good credit.
Follow this advice and stay in the right path. Avoid requesting loans and credit cards youll fail to pay in the future. Learn how to make a budget and stick to it. These are healthy financial behaviors and will make your life peaceful and secure and youll easily save that extra money you need to enjoy your life. Debts on the other side wont let you sleep. Be smart and make conscious decisions when your finance is at stake.
How to Get Money, Even If the Credit Score Is Bad
It is very difficult to get a loan nowadays. Banks have restricted to lend money to people with bad credit reports. This is a result of the financial crisis. Even many people with good credit scores in the beginning of the financial crisis are meanwhile in trouble. They might have lost their job due to the layoffs of masses of people. They might have lost a comfortable side income besides their main job and their income does not cover longer their monthly expenses. Small business owners struggle to survive and need money in order to gap financial straits.
There might be good reasons to need money quickly. Even people who lead a modest life can suffer serious financial problems. The heating or the plumbing of the home needs urgent repair. The car crashed down and needs to be replaced in order to go to work. Children need school equipment, e.g. a new computer for their homework. The dentist bill has to be paid.
The first and best advice is always to work out a budget with the monthly income and expenses and to exercise strict financial discipline. It is better to save the money for unexpected, urgent expenses than to apply for a loan. All these good advices are helpless for the working poor or for people who have lost their job and need to care for a family.
There are solutions for people with a bad credit score:
Government Grants for US residents
Even people with bad credits have access to government grants in the US. It is possible to apply for different kinds of useful government grants: home repair, school supplies, medical bills, public transportation, tutoring or teaching, general living expenses. A government grant could be helpful in order to get assistance to consolidate the consumer debt situation. Several thousand Dollars can be available in a single case. No fees and interest rates need to be paid.
There are some interesting facts about government grants. More than 20 million US people get government grants every year. Six million people get money to go to college, 10 million people get free help and training for a better job. One million entrepreneurs receive money to start or expand a business and four million people get money to invest in real estate.
Pawnbrokers or pawnshops as an alternative for borrowers throughout the world
Pawnbrokers are the lenders of last resort for people with a bad credit reputation. Whoever fails to get a loan elsewhere finds a chance at a pawnbroker or pawnshop. Pawnbrokers can be found everywhere in the world. How does it work? Borrowers get cash quickly by selling the old merchandise or by using their valuables as collateral on a small loan. Once they repay their loan and interest, the collateral will be returned. However, those who borrow money from a local pawnshop should be aware that if the loan is not repaid by the specified time, the pawnbroker has the right to keep the collateral. Pawnbrokers take usually consumer goods as electronics, jewelry, valuable music instruments or antique pieces of art as collateral for a loan. By the way, pawnshops are an interesting source to acquire a consumer good to a good bargain. Not all of the goods that have been given as collateral will be bought back.
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Liliane Waldner