Tag Archives: risk
How To Get A Personal Loan Even With A Low Credit Score
It is important that you understand the role that credit score plays in your ability to obtain finance. It will not only determine whether you get approved or not, but also the interest rate you are going to pay, the loan amount you will be able to get and the length of the loan too.
Credit score is a number that determines your credit situation; it ranges from 450 to 850. The higher the number is, the better your financial situation. If your credit score is below 600 you will probably find it difficult to obtain a loan. However, there are some lenders willing to take the risk and offering options for people with bad credit.
Different Types
There are basically two kinds of personal loans: Secured and Unsecured personal loans. Secured loans imply that the applicant offers some kind of asset as collateral; it may be a house, apartment, car, van, etc. This kind of loans have lower interests since the risk involved for the lender is also lower as he can collect the money obtained from the sell of the asset if the client fails to pay off the loan.
Unsecured personal loans, on the other hand, do not require any collateral, thus, the risk involved for the lender is higher and so is the interest rate. However this kind of loans are the right option for those that are not homeowners and do not have other assets to secure the loan. It needs to be pointed out that though the lender has no direct legal claim over a particular asset when it comes to unsecured loans, he is still entitled to recover his money by taking legal action against the debtor and all of his properties if he stops paying the loans monthly installments. This damages claim usually takes a lot longer than the repossession action associated with secured loans and thats the main reason why secured loans are cheaper. In the event of lack of payment, the creditor will be able to recover his money sooner.
Lately, unsecured personal loans have also become a common choice for home owners. Since the loan industry has become increasingly competitive, the interest rate charged for unsecured loans has been reduced and there is not such a big difference between secured loans and unsecured loans anymore. Those homeowners who are not willing to risk their property are now opting for unsecured personal loans instead of home equity loans which used to be the common financial choice for homeowners in the past.
Online Lenders
There are more and more lenders offering this type of loans, especially online lenders who are particularly fond of the high demand of personal loans. The proliferation of online lenders dealing with personal loans has reduced the interest rate that they are charging to minimums never seen before.
So if youre in need of money, do not hesitate, a personal loan is the right option for you. See in which category of applicant you fit in; and taking that into account make yourself ready for online shopping in search for a lender. You will find out thats the easiest and more comfortable way of obtaining a loan that suits your needs.
Quick No-Credit Check Loans: Benefits And Drawbacks
Quick no-credit check loans are amazing products and are used for many purposes by thousands of people every day. However, these loans as any other type of financial product have pros and cons that should be pondered before applying for one. If you want to know what are the benefits and drawbacks of Quick No-Credit Check Loans, in this article you will find a short explanation along with some tips on how to get approved and make the most out of them.
Benefits Of Quick No- Credit Check Loans
Quick no-credit check loans require no credit verifications and thus anyone can be approved regardless of the credit score or history that their credit report show. Bad credit is not an obstacle for approval with these loans and people with no credit at all can also get approved (young people can benefit from these loans when in an emergency because they get the money needed and get an entry on their credit history at the same time). Even those with a past bankruptcy on their credit report can get approved for these loans.
Thanks to the lack of credit assessment, these loans approval process is resolved quickly and without hassles. Most lenders that deal with Quick No-Credit Check Loans provide loan approval within less than a day and the money is usually deposited in the applicants bank account by the next day but even if a particular lender does not process the loan within the day, they never take more than 72 business Hs. to deposit the amount into the applicants designated account.
Another interesting characteristic of Quick No-Credit Check Loans is that there is no paperwork required. Most of these loans applications can be processed online and electronically without having to make long credit verifications or documentation analysis. Some lenders may require you to fax some information but most of the new loans are promoted as no-fax loans thus excluding the need of faxing documentation on new Quick No-Credit Check Loans.
Drawbacks Of Quick No-Credit Check Loans
Since there are no credit checks, the lenders default the risk assessment to a high risk scenario and thus charge high interest rates for the money lent. Therefore, you should expect to pay significantly higher interest rates than that of credit cards or unsecured loans and lines of credit. The interest rate may be concealed by promoting the loan price as a fixed fee every hundred or thousand dollars but if you do your math you will learn that the rate is actually very high on annual terms.
For the same reason, the repayment programs of these loans are rather short. Since there is a high risk involved, the lender will provide the funds only for short periods of time. You may get longer repayment programs than with payday loans but the schedules will be similar to those of cash advances that provide only a few installments for repayment. Do not expect long repayment programs as with unsecured personal loans that require long credit verification processes.
Finally, you will not be able to get high loan amounts either. Due to the risk, the loan amounts usually average $1000 and seldom reach $2000. Therefore, as you can see, these loans are meant for emergencies where there is no time for credit assessment processes and urgency is the main issue. These loans serve their purpose. What you need to ponder if that is what you actually need.