Getting the Loan You Need with Adverse Credit
Written by: John Mussi
For those individuals who have had credit problems in the past,
getting a loan for something that they need can seem like a
nearly impossible dream. After all, what lender is going to give
money to someone that's had problems repaying loans or credit in
You might be surprised, actually... there are a number of
lenders willing to grant loans to people with less-than-perfect
credit, and some of them even specialize in it.
There are a few things that you can do to improve your chances
of getting a loan even if you do have bad credit; it's all a
matter of knowing where to look and what to ask for.
Using a Cosigner
One of the more common ways of attaining a loan when you've got
bad credit is the use of a cosigner. If you're unfamiliar with
the term, a cosigner is another individual who also signs the
loan agreement, making themselves just as legally responsible
for the repayment of the loan as you are.
Generally, the cosigner is someone that has good credit so that
their credit score balances out your own. Unfortunately, if you
fail to repay the loan then your cosigner is liable for the
repayment as well.
Don't worry, though; cosigners aren't the only way that you can
get a loan, even if your credit does need some help.
Considering Alternate Lenders
Another way to find a loan that you'll be able to get is by
considering alternative lenders. Finance companies and other
lending companies base a large portion of their business on
individuals who have had credit problems. Online lenders provide
some of the same services, often with lower interest rates
depending upon the collateral that you use.
There are lenders that are willing to work with most people,
credit problems or no... you just need to take the time to
explore your options and find them.
Choosing the Right Collateral
Of course, once you've found lenders that are willing to issue
you a loan, you still need to secure it with collateral. So as
to get the best interest rate that you can, it's important to
choose the best collateral... this usually means something that
has a high value (higher than the loan amount you're
requesting), and something that has an easy resale market to
access so that the lender can easily assess the item's value.
Home equity is a common type of collateral used for adverse
credit loans, though if you don't have sufficient equity then
other common collateral items are automotive titles, property
deeds, and precious metals or antiques.
Reevaluating Your Loan Needs
Should you not be able to get a loan for the amount that you're
asking with your current collateral, you might want to stop and
reconsider your asking amount. Try to cut down the amount that
you want by removing any unnecessary expenses from your
estimate, and considering how much of the money you need now and
how much can wait until later.
By decreasing the loan amount, you'll increase the value of your
collateral in relation to the loan... and this helps to
guarantee that the lender will get all of their money back, even
including the costs associated with repossession and selling the
collateral item if you fail to repay the loan.
The more confident a lender is about being repaid, the more
likely they will be to issue you a loan regardless of your
You may freely reprint this article provided the following
author's biography (including the live URL link) remains intact:
About the author:
John Mussi is the founder of Direct Online Loans who help
homeowners find the best available loans via the www.directonlineloans.
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