Bad Credit Loans: The Second Chance You Need

Everyone deserves a second chance. And yes, even when it comes to defaulted loans. After all, we all make mistakes, even financial ones. Perhaps you missed a payment or two on a past loan or credit card bill because of some unforeseen emergency. Perhaps you had to file bankruptcy because of a series of unlucky events in your life. Or maybe you are yet to build up a credit score. Whatever the reason for your current quandary, there really is no sense in beating yourself up over it or even suffering for it later, especially if you have been working hard since then to put your financial affairs in order. This is where you could really use a second chance. The good news is this second chance exists in many forms.

There’s hope for you yet!

In a nutshell, a bad credit loan is a secured loan option specifically designed for those with bad credit history, or those who have difficulty in applying for loans. If you are in a situation such as this, you may already have been rejected a few times by various lenders. Do not let that discourage you because the fact of the matter is there is always a chance that you will find a lender who will take a chance on you. Of course, these lenders will need to assess your eligibility carefully to determine if you really do, indeed, deserve a second chance, so you have to be prepared to jump through a good number of hoops to qualify. Another thing that you have to know and be prepared for is that most of these bad credit loans have significantly higher interest rates compared to the loans offered to people with good credit.

Bankrupt? No problem!

If you have been discharged from bankruptcy for at least 12 months, then you may already be eligible for a loan. However, you have to be ready to substantiate a lot of things before you can even be considered. First, you are going to have to explain why you were bankrupt in the first place. Then you will have to show proof of your improved financial position in the form of bank statements to prove that you currently have a good savings history, preferably in the last six to 12 months, as well as show that you currently have stable employment and residence.

It’s in your best interest!

You may still be able to qualify for a decent interest rate if you are able to provide some equity towards the loan, which would reduce the amount you are borrowing. This can be in the form of a cash deposit or a trade-in if it is a car loan you want. And speaking of which, if you had an existing car loan while you were bankrupt, but were able to make your payments, you might still be considered for a normal car loan with reasonable interest rates. A subprime loan is also something that you can consider, although these generally have very high-interest rates.

Don’t let bad credit stop you!

If you have bad or non-existent credit, there are actually some lenders that offer no credit check loans. This is pretty self-explanatory. This option, however, is rather costly because lenders tend to charge hefty fees on top of very high-interest rates for this sort of loan. A minimum cash deposit may even be required to minimize the lender’s risk. As a result, you will likely end up paying a lot more for your loan than what it actually is. You may also consider a no-documentation loan. However, this only predominantly applies to business purposes.

Basically, it is always best to get professional advice to ensure that you will be able to get the best possible second chance loan option that is most ideal for your specific circumstance. It is not the end of the line, but it is also not enough to simply know that there are options out there. You have to make sure to take the time to do your research and weigh your options carefully to make the best possible decision. After all, you do not want to end up being in a worse spot than where you started out, so do not jump the gun.