Personal Loans: Available Even for People with Bad Credit

Heindrick So

If you're like one of the many borrowers struggling to manage your credit card debts, car loan, or other consumer debts, it may be time to consider the professional help of a debt consolidation company. These online debt consolidation companies can help individuals secure simpler monthly payments and lower interest rates on their debts--but best of all, the process is even easier than before with online lenders just a click of button away. Whether your debt problems are small or large, ther are a number of options that may be available to you online.

Consolidate Your Debts With A Personal Loan
What Is A Personal Loan?
Unlike a mortgage or car loan, a personal loan is an unsecured loan since borrowers do not have to put up collateral to obtain the loan. With a personal loan, some borrowers may not even have to go through an extensive credit check. Additionally, personal loans are much quicker to obtain since there is no formal closing. In fact, the money from a personal loan could be deposited into your checking account as soon as 24 hours. You can then use this cash for almost anything--but most times, personal loans come in handy during emergency situations.

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Are Personal Loan Given To Those With Bad Credit?
Like any other loan, you typically have to fill out an application and see if you qualify under the bank's lending requirements. Although it might be a more difficult process, even borrowers with bad credit can still obtain personal loans. A typical loan application requests your full legal name, social security number, income and other relevant financial information. From this point, a loan officer traditionally determines your credit worthiness from the given information-- including any issues with an applicant's credit history. If you suspect your credit score might be lower because of a mistake or inaccuray, the first step should be to review your credit report. By obtaining a detailed credit report from the major credit bureaus, individuals can look over the entire report to see if there are any misreported bank charges, typographical errors, or even fraudulent activity. If credit problems are more severe, there are agencies which can help you repair your credit score and provide counseling to improve your credit is in tip-top shape since it can affect your loan's interest rates and chances of qualifying.


How Can You Get A Personal Loan?
Since personal loans are easier to obtain, there are also stricter limitations on how much individuals can borrow. Typically, lenders limit the amount to no more than $1,500. In addition to your credit, your income may play an important role in evaluating your personal loan application. Loan officers may check to see if you have a steady income, and if you've held the same job for a number of years. This gives the bank a better idea of how likely you'll be able to repay the personal loan. For example, if you've changed several jobs in a short period of time, banks may be hesitant to lend you a large amount of money--or even lend to you at all.

Portunately, the application process for a personal loan is relatively quick. The entire process inclues the initial application, a promissory note, and a payment schedule contract. Compared to secured loans such as mortgage and car loans, there is generally less pagerwork and hassle to obtaining a personal loan.


Some individuals should also consider the possibility of obtaining a personal loan form a professional organization which they already belong to . Like credit unions and other less popular options, the adventage to this route would be lower annual percantage rates(APR) compared to most traditional finance companies. Additionally, these organizations may alse be willing to lend you more money than most other lenders--some may even offer you up to $25,000.

Shopping for a Personal Loan
When shopping around for a personal loan, be sure to review payment terms and other fees that may apply. A common fee that some consumers encounter is the prepayment penalty fee, which is applies when a borrower pays off a loan earlier than expected. Some borrowers might also be interested in deferred payments and extended terms lasting as long as 5 to 6 years in some cases.

So whether you're looking to consolidate debt, pay off medical expenses, fund educational costs, or make home improvements, personal loans may be flexible enough to meet your needs. Once you've decided on a personal loan, work out the numbers with a loan specailist and figure out just how much money you'll need. Although personal loans can be quite handy at times, the sooner you can pay off these loans, the better off you should be financially in the future.

About the Author
Heindrick So is a mortgage consultant at a local Bay Area Real Estate Brokerage-specializing in residential wholesale lending. Heindrick frequently contributes to various finance columns, ranging from home loans and mortgages, debt management, and other personal finance topics.