Poor Credit Unsecured Loans – The Most Common Variety

I think I can offer people out there with bad credit some hope when it comes to getting poor credit unsecured loans. You might be hunting for the loan you need, worried that you won’t be able to get qualified because you’ve really hurt your credit during the last few years.

The reality is that most poor credit unsecured loans are a type of payday loan, and those don’t require any credit at all. Everything I’ve read and researched lately tells me that these lenders who give unsecured poor credit loans are only looking for a few key criteria:

a. Are you employed full-time? Or at least do you have income in excess of $1,000 to $1,500 per month? I’ve found that these lenders aren’t typically concerned with where the money comes from, whether it be income from employment, unemployment, or even social security income. They just don’t want to lend you the money if you don’t have an obvious means of paying it back.

b. Do you have an open bank account, and does the bank allow direct deposits and automatic withdrawals? This is partly an insurance policy for the lender, and partly for convenience in their processes. Many of these lenders operate on the internet, and they don’t want to have to be dealing with paper checks and snail mail, etc. Once you qualify they want to send you the money straight away. That’s why they’re able to approve you at 3pm one day and have the money in your account the following morning.

They need the direct withdrawal system in place so they can automatically deduct your payments from your account without having to invoice you or send you a statement via snail mail. They will email you a statement after they’ve made the withdrawal, but it’s just standard practice to set up an auto pay system to pay these loans back. That’s really in your best interest as well.

If you can meet these simple qualifications, you’re really not going to have a problem getting an unsecured loan with poor credit. Just be sure to use them responsibly and keep enough money in your account to keep the payments current and get the loan paid back on time with no extensions or renewals. That’s where they really get you.

No Credit Check Home Loans

No credit check home loans, huh? I guess it’s worth a shot; you’re thinking “somebody out there on the worldwide web must offer a home loan that doesn’t require a credit check at all.” Well, I’m not going to say that there is definitely no such thing, but it’s going to be a lot tougher to get than a $5000 loan no credit check. Let’s talk about it.

If a lender doesn’t check your credit before giving you a home loan, on what criteria could they possibly qualify you?

Okay, that’s actually a fair question. Let’s put ourselves in the shoes of the lender, and pretend that we are trying to decide whether to give a person a home loan without looking at any kind of credit history. What criteria could we use?

1. The down payment. Not only will the down payment reduce the risk to the lender, it says something significant about the prospective borrower. It means they’ve saved money over a period of time, and probably a substantial amount of money. If possible, I’d like to get records of deposits going back several years to see how much they’d be setting aside each month, and how consistently they did it. That way, if I couldn’t see a record of payments they’d made to creditors, I could at least see a record of unforced payments made to themselves. That would be a good indicator of their credit worthiness.

2. The income statement. I’d have to know that they’re monthly income could more than support the monthly payment on the loan I’m giving them, even if I had the record of their excellent savings habits.

3. The debt statement. This is close to a credit history, but I’m not even wanting to see a track record of payments. I need to know what their monthly debt service is so I can do the simple math and decide whether the new loan payment is going to overload them.

4. Serious personal references. I’d have a loan processor call at least 5 to 10 people that are both impartial and know the person well enough to say whether the applicant is credit worthy. I’d be looking to hear that the applicant is one of the most disciplined, responsible people they’ve known.

With those four criteria in place, I suppose you could theoretically give somebody a home loan with no credit check. But I’m afraid you’re still dreaming. It’s never going to happen. The best thing you can do is apply for a bad credit home loan. Those really do exist, but guess what? The first three criteria I mentioned above will be a major factor in that process as well, so you’d better make sure you have them in line if you want to buy a home and you have no credit or bad credit.

Getting Online Loans with Bad Credit

Your search for online loans with bad credit could you end with you buying a car, taking out a payday loan, applying for a secured credit card, or refinancing your house. I think it’s safe to say there’s almost no type of loan out there that can’t be found online anymore, and that’s really to your advantage. When borrowers have so many different options in one place it forces lenders and brokers to provide the very best terms they can, as well as pushing them to give better and better service.

Some of the most commonly sought loans are instant unsecured personal loans. In this group you could include payday loans and signature loans with bad credit. In any case, the goal of the loan-seeker is to get a short term cash loan overnight that bridges the gap between today and their next paycheck. These loans are most often used in emergency situations, and lenders capitalize on the relative desperation of the applicants by charging extremely high fees or interest rates on these loans – sometimes as much as $30 per $100 borrowed on a loan with a term of 7 to 14 days. If you annualize that interest rate you’ll be ill, so don’t bother.

Another commonly searched loan is the guaranteed bad credit online loan. Now, some confusion tends to settle around the term ‘guaranteed’ with this loan. I believe most web searchers are using the word guaranteed in their search in hopes that the loans they find will come with guaranteed approval, and that is often the case. On the other hand, a guaranteed online loan can be one where the applicant brings a type of co-signer to the qualification process due to his or her bad credit. The co-signer is most often a friend, family member, or representative of a community club or organization the applicant belongs to. This guarantor’s role is to say “If he skips out on the loan, I’ll make his payments.”

This kind of a situation tends to go much better for the lender for two reasons. One, the co-signer will is committed to making the payments, so the bank has an extra line of defense against losing their money. Second, the co-signer creates some very personal accountability for the borrower.

Finally, you have unsecured signature loans (payday loans), which usually doesn’t require much from the applicant and can put the money in his/her account within a few hours of approval. All the applicant will have to show here is that she has an active bank account with direct deposit capability (both for the cash to be put in and for payments to be automatically withdrawn) and a steady job.

So you can see that there are plenty of options when it comes to online loans for bad credit. You just need to find the one that suits your situation best.

Car Loans for Poor Credit

Nearly every day I see ads – freeway ads, internet ads, and TV ads – appealing to car buyers with bad credit. The constantly echoed mantra is “we finance everybody, regardless of credit score.” The fact is, most of these advertisers aren’t lying; they’re being truthful about the fact that they’ll lend to nearly anyone. The question is whether they’re acting in the best interest of their customer.

As a person looking for car loans for poor credit, you need to accept two realities before you do your first web search for a new car or visit a single dealer: you’re going to pay a higher interest rate and you’re going to have to make a higher down payment, period. Those two facts are a foregone conclusion. Where you need to be cautious is in deciding whether the price of the car and the interest rate you’re being offered are anything reasonable.

The research I’ve done tells me there are some very unscrupulous lenders who will try to take advantage of your credit-challenged status – taking car loans for people with poor credit to another level. For example: they know that you’ll feel your options are limited due to your low Fico score, which means you’ll be less likely to walk away from their car lot if you really believe you won’t be able to find better deals out there. Knowing that, they’ll take a car whose normal value would be somewhere in the $2,500 range and stick a price of $5,000 on it. Then they’ll say they need $1,500 down and finance the remainder at something like 23%.

Sure, you could walk away with a car, but almost anyone’s standards you got screwed (pardon my french). The key to avoiding this situation is to do your own research on different makes and models of cars you might be interested in buying, studying their blue book values beforehand so you’ll at least have a sense of whether the dealer is trying to take advantage of you.

One of the best places to get a car loan with bad credit is an actual new car dealership (used cars got their reputation for a reason). If you can actually afford a new car, you’re much more likely to be treated honestly and fairly by a new car dealer who doesn’t just make their money from these outrageous financing deals – they actually profit from the sale of the car. That gives them better incentive to give you the best possible financing options so you’ll actually purchase the car.

The burden is ultimately on you to make sure the deal is in your best interest; you can’t count on anyone to care more about your financial situation than you do. My best advice is to get a small, economical car with you’re using a poor credit car loan to get it. Drive a little beater for a couple of years while you reestablish your credit and save some money, and then you can go out and buy a car you really want with terms that won’t make your financial advisor sick to his stomach.

No Credit Check Personal Loans with Options

Personal loans…known by many names, used by millions of people, and much-maligned by the rest of the financial world. These loans get a bad rap from almost everybody, except the people using them. What some don’t realize is that not every personal loan is a payday loan. Borrowers actually have some options when it comes to choosing no credit check personal loans. You’ve got everything from signature loans to a $5000 loan no credit check.

One alternative is the signature loan. It carries some similarities to the payday loan, but most signature loans offer more options and flexibility. I even found one loan provider who runs a program they call ‘signature loans on the honor system.’ It’s a very interesting system, and it’s based on the fact that the lender does take the borrower through an approval process designed to make sure the borrower can be trusted. If the borrower gets approved, the lender actually removes some of the requirements that are nearly universal with payday loans. Specifically with these kinds of loans the borrower doesn’t have to authorize the lender to automatically withdraw payments without notice. The lender sends the borrower a statement that says payment is due, and then the borrower authorizes the withdrawal. Seems much more respectful to me really, and gives the borrower the opportunity to show their ability to manage their own finances.

You might be wondering what kind of approval process is involved; it seems like this kind of loan would have to involve them pulling your credit, but it actually does seem to be a personal loan with no credit check. What they look for in a loan applicant is the ability to prove they’re gainfully employed, or at least earning income through some source, even unemployment or disability income. You do have to maintain an active bank account. As part of the application process the lender may also want to do some checking to see if you have other outstanding loans, and they may even call to visit with you to make sure they trust your willingness to repay the debt.

To me, this kind of no credit check personal loan seems a really good alternative to the traditional payday loan. They’ll let you borrow up to $800, and if you have your application in by a certain time of day they’ll have the money in your account by the following morning.

So, if you have no credit and you need a personal loan, give this kind of service a look. As always, borrow intelligently, keeping your long term financial goals in mind. You don’t want to be searching for this kind of loan once a month, or even once a year if you can possibly help it.

Are No Credit Check Student Loans Real? Yes and No.

It’s basically common knowledge that you have two types of student loans: federal and private. What’s less commonly known is that the only student loans with no credit check are the federal variety. Every private student loan provider is going to check your credit, every time.

A no credit check student loan starts with the FAFSA, which stands for Free Application for Federal Student Aid.  FAFSA is also the doorway to many other financial aid programs, but those are topics for another article. The most common next step after you’ve filled out your FAFSA is to get some kind of Stafford loan, the most common subsidized federal student loan. Because you’re dealing with the government’s program here, there will be no credit check. They use other criteria to decide whether you qualify, including factors such as your own income and the income of your parents or other sources of financial support. The government feels strongly enough about education that they’re willing to back loans made to students who have essentially no business borrowing the money.

On the other hand you have private student loans, where there will be a credit check, and if you should happen to qualify you’re likely to borrow much more money than you really need, at higher rates than you would ever want to pay, with no real opportunity for a loan consolidation after you graduate – at least not one that compares to student loan consolidation programs for federal loans.

So, not only is it more appealing to go with no credit check student loans – it’s also the right move financially in the short term and the long term.

Home Loans with Poor Credit

Recently I was talking with a friend who’s living with his parents right now, along with his wife and three kids. He’s 34, and he ended up living with his parents after going through a rough patch with his employment and missing some payments on his other debts. His wife’s credit went in the tank too, because her name was on the loans with the missed payments. It’s a bit of a mess, but a couple of years have passed since he went through all that, and he and his wife are looking to buy a new home now. Obviously they’re going to have to look into home loans with poor credit.

What people don’t realize is that getting a poor credit home loan isn’t a completely impersonal process. Yes, lenders have to consider your credit score as part of the qualification process, but that doesn’t mean they have to completely neglect the human element. The first and biggest piece of advice I’d give a  credit challenged home loan applicant is to contact every bank and credit union in your city or county.  Local lenders are much more likely to actually sit with you and have a sincere conversation about the factors in your application that don’t show up in a credit score.

You really want to explain to them, being completely truthful, what circumstances led to your bad credit status. Think of this like a job interview, and imagine you’re telling your new prospective boss why you got fired from your last job. It’s actually a very similar situation. One thing you don’t want to do is lie or make excuses. You’re trying to make it clear that the past is the past, and although you’re responsible for what happened, you’re never going to let it happen again. Make sure you can paint a very clear picture about what’s different in your circumstances now compared to when you wrecked your credit. They’ll appreciate a sincere explanation much more than a laundry list of hard luck excuses and stories about how “it’s not your fault.”

The next best piece of advice I can give isn’t something you can complete in a day, a week, a month, or probably even a year. You need to a) minimize your personal debt, b) increase your income, and c) save up a nice down payment. Remember, you’re trying dealing with home loans for people with poor credit. Nothing strengthens the message that you’ve changed more than being able to show them a credit report that, although it shows  a low score, doesn’t show any consumer debts on it.

There’s a psychological benefit as well as a tangible benefit to having almost no other debt when you’re trying to get your home loan. The tangible benefit is that your debt to income ratios will look great (especially if you followed the advice about finding ways to increase your income). The psychological benefit is that the underwriter will be able to look at your report and say “this person has obviously made some big changes in his/her personal finances.”

If you make the effort to go through these steps I feel confident you’ll be able to qualify for the home loan you want and need sometime in the next year or two.

Low Interest Student Loan Consolidation – Fact and Fiction

As the cost of a university education climbs relative to the amount students can borrow through federally subsidized programs, it’s becoming more and more common for students to use a mix of federal and private student loans to finance their education. The availability of private student loans can be viewed as a positive in that it allows more people to complete their education, but there are some real negatives to private education financing as well.

My biggest concern, as one who got out of school relatively recently, is that student loans are universally thought to carry low interest rates, but that’s not necessarily true with private student loans, whose interest rates are determined by the lenders. The idea that all student loans are low interest comes from the fact the government controls the amount of interest charged on federal student loans. We need to make sure that distinction is clear in the mind of the average student, because I’m afraid many students take on private financing they might not need based on the idea that they’ll be able to go through a low interest student loan consolidation with all their loans. That’s obviously not the case, and if these kids aren’t careful they’ll end up with payments that cripple them financially just as they’re trying to establish themselves in the professional world.

If you’re a student, or if you’re researching the subject on your child’s behalf, you really need to understand why a student loan consolidation with low interest is rarely possible with private loans.

With a private student loan consolidation, all that’s really taking place is that you’re combining your private loans into a single balance with one payment, one interest rate, and one repayment period. The interest rate on that single loan may or may not be lower than the rates you were all ready paying with your unconsolidated loans. It will completely depend on your credit score and the offer the lender makes you. The only way you’ll see your payment go down after the consolidation is complete is if the lender does happen to offer a lower rate or if you restructure the repayment period so the loan will be repaid over a longer period of time. That kind of restructuring obviously won’t mean you’re paying less interest – you’ll actually be paying more because you’re dragging the loan out over more years.

Here are some general ideas as far as the terms of the loans you’ll get through a private consolidation:

• 15 to 30 year maximum repayment terms.
• interest rates between Prime+1% and Prime+6% (not so low really).
• minimum balances of $5,000 to $10,000 to qualify for consolidation.
• maximum balances of $100,000 to $300,000.

It really pays to manage your money well while in school; the payments on these kinds of loans will be relatively steep. If you’re the kind of person that wants to follow your passion in your career, instead of having to chase a big paycheck, I’d really encourage you to absolutely minimize the amount you borrow.

Bad Credit Payday Loans

People hear the term ‘bad credit payday loans’ so often, but I don’t think the average person really understands the payday loan industry. Yes, it is kind of the wild west of lending, but there are regulations and limits in place to protect the borrowers, who do at times seem to need protection from themselves. I want to discuss certain aspects of payday loans so you have a better idea of what they are, and what they are not.

So what exactly is a payday loan?

It’s a short term cash loan from direct lenders to borrowers who need to borrow against their next paycheck. The loans usually vary in size from about $100 to a maximum of $1,500.

How do payday lenders make their money?

Payday loan providers make their money off the comparatively high interest and fees they charge on these short term loans. Fees usually range from $10 per $100 borrowed to $30 per $100 borrowed. While there isn’t a nominal interest rate attached to the loans, there is an effective interest rate that stems from the fact that most lenders will let you extend the repayment period for another fee. This is actually where payday loans get their bad name.

Using a calculator on paydayloaninfo.org, I calculated that a loan that gets renewed eight times (the lower end of the average according to my research) will end up costing the borrower $180 to repay over a 16 week period. That’s an effective APR of 260%.

Are payday loans hard to qualify for?

Fortunately, and unfortunately, no. They’re very easy to qualify for. Nearly anyone with an active bank account into which the loan can be directly deposited can receive a payday loan, even with terrible credit. The only other requirement is a job. This is fortunate for those people that are really desperate for some cash, and unfortunate for those same people. Once you think about the fact that the average borrower renews or extends her loan eight to thirteen times, you realize how people can really ruin themselves with this kind of debt.

You should be extremely cautious if you have to borrow money this way. It might relieve the stress you’d feel for a few days, but it will magnify the stress you have in the weeks and months to come.

Bad Credit Auto Loans after Repossession or Bankruptcy

For a guy like me who has spent more than two decades in the loan business, it’s still hard to imagine a type of loan where absolutely anybody gets approved. But the fact is there are bad credit auto loans that absolutely anyone can qualify for. I suppose that’s not such a bad thing. If people can’t get reliable transportation, they have a very hard time keeping steady employment. I don’t want more people in the welfare offices just because they had a repo a couple years back and now they can’t get a loan to buy a car.

But if you have damaged credit and you’re looking for $5000 auto loans, you probably have a few questions, and I’m guessing two of the more commonly asked ones will have to do with repossessions and bankruptcy.

First, repossession. Yes, there are lenders who won’t mind a repossession, even if it happened in the last year. But there will be some conditions. The repossession can’t have been part of a bankruptcy, and there still technically needs to be a balance on the account (even if you’re not making payments anymore). If you’ve had a repo you’ll have to bring a bigger down payment to the table, and lenders aren’t going to want to finance an old clunker, so you’ll need to buy a more recent model car that still has a warranty in effect. Make sense, doesn’t it? If you flake again and they’re left with a car, they want one under warranty so they can fix it for free (if it needs repairs) and sell it at a higher price.

And what about bankruptcy? Yeah, you’ll still be able to get financed even if you have a bankruptcy on your record. But again, some conditions. One, the bankruptcy will have to be complete and discharged. They don’t want you applying for a loan while you’re in the middle of asking the courts to let you off the hook with the rest of your debt. Second, your bankruptcy trustee will have to give you a document called an Authorization to Incur Debt for you to include with your application. That pretty much explains itself doesn’t it? If you’re bankrupt and looking to borrow more money, the lender is going to want to know that you have permission from the folks who handled your bankruptcy.

This topic isn’t a glamorous one, I know. But you, and millions like you, are in the dog house with the credit agencies right now. You still need transpo to get yourself here and there, and you need an opportunity to borrow some money so you can make payments and rebuild your credit. No credit check auto loans with repo are a great tool to get the process going.

Low Interest Personal Loans – Possible?

Personal loans are nearly universally expected to carry terrible interest rates and ludicrous fees because people almost always think of them as payday loans. But that’s not completely accurate. You can also think about personal loans as signature loans, and those can very often be had at low interest rates.

So let’s talk about what it would take to lock up low interest personal loans. What’s the most predictable qualification for a low interest rate on any loan, personal or otherwise? That’s right, it’s a good credit score. If you want a bank to hand over a chunk of money with based on nothing but a signature and a handshake, it will only be because they can look at your credit history and see that it’s basically immaculate. I’m talking about a 700+ fico score. If you don’t have that taken care of, don’t expect to qualify for a personal loan with low interest.

But it doesn’t end there. The bank wants you to have a good credit score, but there’s something else they want you not to have, which is too much debt. Part of their analysis of you as a borrower is going to be to look at all the monthly payments you’re responsible for and then add the minimum payment that will come with the loan they’re about to give you. If that minimum payment will push you past a certain monthly payment load, no loan for you. I’m actually very glad that lenders have this practice. I know they only do it to protect their bottom line, but it also protects your bottom…line.  Working hard for your money and then watching it all flow right back out due to your high monthly debt service is a recipe for burnout and stress. You don’t need that headache.

So I guess part of the low rate personal loan equation is either not having much other debt, or having an income so high that your monthly debt isn’t a big factor. But I’m guessing that’s not the case with most people looking for some short term financing.

In any case, take good care of your finances. If you can’t get low rate short term loans now, work at it and the day will come. Of course, when that day comes you may not (hopefully) need them anymore.

Unsecured Personal Loans for People with Bad Credit

It’s a sick feeling to see your bank account go to zero when you still have plenty of month and plenty of bills left. When I was getting my first business started I had that experience plenty of times, and I hated it. Fortunately I could rely on my credit cards to get my through during those times, but I know many people who read this won’t be in a similar situation. For many of you, unsecured personal loans with bad credit will be the only real option.

At the same time, I don’t want to make it seem like getting a bad credit unsecured personal loan is the end of the world. It might be exactly what you need to put food on the table, make some emergency repairs to your car, or buy your son or daughter some clothes they really need for their latest sporting event or school activity.

The only reason anyone gets upset about these kinds of loans is that there’s a real stigma associated with debt, and especially debt that comes with steep interest rates, as an unsecured bad credit personal loan will. Even I’m a little judgmental of people who need these loans at times, because I really hate the idea that through some lack of personal discipline or planning you’d have to pay triple-digit interest plus fees just to make your bills work for the month. But I do realize that there are times that people just have an awful string of unlucky events in their life which no amount of preplanning would have prevented.

For those situations it’s actually fortunate that people can borrow these short term loans. I’d guess that many people who do use them only end up having to go through the process once, and the feeling of paying such exorbitant interest and fees would be enough to keep them from going through it again.

Just so you’re clear on the process, an unsecured personal loan – with bad credit – is going to require certain things from you such as:

• proof of a job you’ve held steadily for several months.
• proof that you earn at least $1,000 to $2,000 per month at that job.
• an open, active bank account.
• direct deposit of your paychecks to that bank account.

If each of those criteria are in place, getting your loan approved for as much as a few hundred or even a thousand shouldn’t be out of the question. I hope you’re able to take care of whatever circumstances created the need for this loan, and I hope you don’t find yourself needing one again.

Bad Credit Mortgage Refinance Solutions

I suppose I could think of a few reasons a person would be trying to refinance their mortgage after they have bad credit, but I’d guess the biggest reason would generally be that they’re in over their heads and they’re trying to lower their payments.

If this is you – the seeker of the bad credit mortgage refinance – you need to have a few things clear before you start this process. You also need to have very realistic expectations about what the outcome could be.

If you’re looking to refinance because your payments are just too big and you’re starting to fall behind, working with your current lender seems like the wisest choice, but they’re often surprisingly stubborn or just plain unwilling to talk about restructuring your loan so you can keep your credit intact and also keep up on your payments. I knew of a family whose house payment was overwhelming them. When they contacted the bank to see if there were options that would help them avoid foreclosure, the bank said “just make whatever payments you can and we’ll get in touch with you.” They realized the bank wasn’t going to work with them, so they went ahead and just quit making their payments altogether. Sure, they get to skip a few mortgage payments while the bank is processing the foreclosure paperwork, but their credit is ruined.

I’d say it’s much wiser to walk away from that bank if they don’t want to work with you and do whatever you can to save what’s left of your fico score through a refinance mortgage with bad credit.

I’ve heard from people in this situation that it’s usually a good idea to try to work with a local lender when you want this kind of refi. They have a vested interest in the strength of the local real estate market, and they know you’re going to talk with your friends about whether they were willing to help you out or not. Having that kind of leverage will help you when it gets down to the nuts and bolts of whether you’ll qualify.

The first question they ask is going to be “why aren’t you working with your current lender to refinance the house?” I’d just be completely honest with them and say “We’re trying to save our credit and they don’t want to work with us. We need to find a lender who can figure something out with us so we can keep the house and still make our payments.” That kind of honest will actually go a long way.

Yes, you’re going to have to go through the standard underwriting and qualification process from there, and your missed payments are going to hurt you. But if you have some equity and enough income to handle the new payment, you just might be able to pull a bad credit refinance off.

Credit Cards for Bad Credit to Help you Get Started or Rebuild

Let’s take a close look at credit cards for bad credit, because if you sign up for the very first one offered to you I think you’ll probably end up regretting your decision (because you’re going to be paying fees and interest rates that might not have been there with another card). Of course when it comes to choosing a credit card you’re always looking at a few standard criteria, such as annual fee, credit limit, deposit required (if it’s a secured or prepaid card), APR on purchases, cash advance APR, balance transfer offers, and of course the all-important rewards programs.

Not all of those factors are going to come into play with credit cards for people with bad credit. For example, these kinds of cards aren’t typically going to have rewards programs or special offers on balance transfers. These cards are geared more toward people who’ve either really messed up their credit or are just trying to get their foot in the door of the credit world.

The big distinguishing characteristics of this type of card are the fees, the deposit required, and the purchase APR.

You’re likely to see many of these cards start with a 9.9% APR on purchases, which isn’t terrible. If you have some kind of credit, albeit damaged, you can probably get a minimum credit limit of around $250 without a deposit, but the fees are where they’ll get you.

I checked out three different Mastercards for bad credit, and the fee structure just blows my mind. Let me summarize their fee disclosure paragraph from the offer (small amount of sarcasm included):

“If we happen to qualify y0u for a credit card, we’re going to take all our fees for the first year up front. This includes an account set-up fee of $29, a program fee (huh?) of $95, and on top of that we’re sticking you with an annual additional fee of $48. But wait…there’s more! We’re also going to charge you $7 per month for ‘participation.’ All of these charges will be on your first statement, and your available credit will be whatever happens to be left over when we’re done with you. If your credit limit is $250, you’ll be left with the grand sum of $71 available on your card.”

Kind of hilarious right? But let’s keep this in perspective. Credit card providers have to make money, and as a no credit or bad credit applicant you pose a big risk. They’re giving you credit and immediately getting monthly payments from as a way of protecting their bottom line. This is the cost of establishing, or rebuilding, your credit score. If you’re smart you only have to ‘pay to play’ once. After this initiation into the world of credit you’ll have your shiny new fico score to get you low fees and interest rates on anything you borrow.

Bad Credit New Home Loans

Buying my own home for the first time was one of the most exciting experiences of my life; I had rented for years with my wife, and now we were ready to buy our first home. Our credit was relatively good, but I realize that’s not the case for many people out there who are hoping to live the dream of home ownership in spite of their damaged credit. They’re looking for bad credit new home loans.

Now, there are certain aspects of new home loans with bad credit that are universally part of home financing.

First of all, you have the typical facts relating to the home itself and the purchase price. Whether you’re a good credit or a bad credit borrower right now, the loan to value ratio (LTV) is going to be a major factor in whether you successfully finance the home. Banks are going to run screaming from almost anything but an 80% or lower LTV right now (yeah – they’d really prefer to see 70% or 75%).

Then you have the down payment. Even if you happen to be buying a home where the LTV is low due to the purchase price being low relative to the appraised value, most lenders are going to want you to have some ‘skin in the game’ in the form of a down payment. This will be especially true if you’re trying to get a new home loan with bad credit. Personally, I think it’s important for you to put a down payment on your home. During the few years there where the lending industry went completely insane, way too many people were able to buy expensive homes without ever sinking a single penny of their own money into the deal.

When you don’t have to put any money down I don’t think you’re fully prepared to make the mortgage payment when it arrives. It’s as though you got a ‘free house’ and I think that’s the wrong frame of mind to be in when you’re taking on such a major expense.

If your LTV and down payment are squared away, the final major consideration for the lender will be your income relative to your total monthly debt payments, factoring in your new mortgage. Lenders these days are going to be very stingy about letting that number go above 28%, and they’ll be very leery of any borrower with lots of unsecured debt, namely credit cards.

Getting a bad credit new home loan can work out for you, but you may have to spend a couple of years making yourself look better on paper so you can qualify, but do it with the best possible terms. The preparation process will actually be one of the most valuable experiences you go through in your financial life.

High Risk Business Loans to Keep Your Business Afloat

Running a business, no matter how simple it seems like it should be, is an extremely complicated process. Most of the time you hear people talking about how hard it is to get a business off the ground, and how such a high percentage of businesses fail in their first couple of years of existence. What you don’t realize is that many business struggle just as badly when they experience a little bit of success. Cash flow management is not an easy thing to do, and even business with steady sales find themselves short of money at times, and that’s when high risk business loans may be the only thing that keeps them alive.

A high risk business loan is actually a pretty risky prospect on both sides of the table. On one side you have the business owner who is an extreme cash crunch. They’re not even sure about whether their business will survive, let alone whether they’ll be able to pay back the loan.

The other party is the lender, and they’re extending this credit to what could be a sinking ship with no hope of recovery. You might ask yourself why these lenders would take this chance at all. Well, like all lending situations, they make the loans because they know the statistics of their business. If they charge high enough interest rates, and require enough of a down payment, they’re business can stay profitable.

The amount being lent in with high risk small business loans depends completely on the size of the business, in terms of sales, and the amount of cash they can put down on the loan. The more they can prove in terms of monthly sales, the bigger the loan they can qualify for.

You’ll notice I haven’t mentioned anything about credit score with these kinds of business loans. The fact is lenders in these situations don’t usually look at the credit-worthiness of the business owner, they just look at the business characteristics and make their decisions based on whether they think the business can handle the loan.

Business owners who have to use this kind of financing to keep themselves afloat should take it as a serious wake up call. They need to manage growth carefully with an extreme bias toward liquidity. Business ownership and personal finance have this in common – running out of cash is the absolute worst thing that can happen to you.

No Credit Check Payday Loans

It just doesn’t make any sense to the average person who has no experience with the world of payday loans how these lenders can offer no credit check payday loans. The whole lending system hinges on people’s credit scores right? If we don’t check their credit we’re going to end up with billions of dollars in defaulted loans. Well, I suppose that’s what has happened with the mortgage industry, but payday loans are actually a different story.

If you look at the qualification process for a payday loan with no credit check, you realize these lenders have figured out what an applicant needs to bring to the table in order to be likely to repay. I did a little checking and found that the four most important things to a payday loan store are:

1. Whether the applicant’s income is set up on direct deposit to their bank. I don’t know if that’s just an indication of financial responsibility, or if the lender could actually  has you sign something that says they can garnish your direct deposit income in the event you don’t pay.

2. Whether you’ve held your current job for at least three months. This is interesting because they aren’t checking a credit score, but they are looking for some kind of stability in your life to feel more confident that you’ll pay back your loan.

3. A bank account in your name, which you’ve had open for at least three months. Again, I think they’re just looking for some stability and financial maturity here.

4. $1,000 per month minimum for your net income (which means after taxes). This goes purely to your ability to pay the loan back. Most payday loan operators won’t lend above $1,000, so they’re basically saying we would never lend someone more than one month’s earnings. And I’d guess in most cases they probably won’t even do that. Since $1,000 is the minimum required income, and $1,000 is the maximum available loan, you’re probably looking at more like 25% to 33% of net income as the maximum loan amount.

If you can meet these criteria, you can probably get the loan you want. I just hope you only need it once.

Finding a No Credit Check Credit Card

Part of becoming an adult is establishing your credit. As much as we’d all love never having to borrow money for anything we need, that’s just not realistic. If you want to own a home or a car, you probably have to have credit (well, I supposed you don’t have to borrow for cars, but most people aren’t willing to save enough to buy the car they want, and they’re not willing to drive the car they could actually pay cash for). So you’re going to need some credit, which means you need to use the right tools to help you start building your credibility as a borrower. A no credit check credit card is going to be one of those tools.

Let’s be clear about what credit cards with no credit check are. They’re not high limit cards; they’re very low limit. They’re not fee free cards, they almost always come with fees. And they’re usually not unsecured cards; they’re usually prepaid or secured. So, you’re going to be paying for this credit building tool, and it’s not going to be glamorous. We’re not talking about an Amex Black card you see the rich folks and the celebrities walking around with.

Essentially what’s happening here is the credit card provider is saying “you have no experience with credit, and there’s no proof or even evidence that lending to you is a good idea. We’ll give you a card that allows you to borrow up to the amount you keep on deposit with us, and then we’ll watch how you use it. If you’re smart about it we’ll start to bump up your privileges with the card and eventually allow you to use the card beyond the amount of your security deposit.”

This is one of the real ironies of building up your credit with a no credit credit card. The more effectively you do it, the more easy it becomes to bury yourself in credit card debt. Don’t make that mistake. I personally don’t think it’s a bad idea to have a couple of credit cards with high limits, but you want them there strictly for emergencies. There’s no reason at all to get in the habit of actually using these cards or carrying a balance.

So yes, you need credit, and getting credit cards with no credit can help you make your name with the credit agencies. You really just need to be so careful about how you do it because credit can either be your best friend or your absolute worst enemy, and you get to decide which.

Qualifying for a Guaranteed Unsecured Personal Loan

The process for getting a guaranteed unsecured personal loan isn’t really all that complicated. It goes something like this:

1. Have a pulse (because almost anybody with a pulse can get one).

2. Be willing to pay high interest rates and high fees (how else are they going to protect their loan without securing it with collateral?).

3. Fill out a quick form online, in a payday loan store, or over the phone, giving all your relevant personal facts (including your social security number).

4. Show some proof of income.

5. Deposit the money in your bank account.

And that really is about it if you want a guaranteed loans for bad credit with no fee, which is a huge mouthful by the way.

Now, the real question is can you afford to be borrowing money like this, and what got you into this situation in the first place?

I know most of us think that your average seeker of unsecured loans no credit check is a semi-scummy low income type, but that’s a completely unfair generalization. I’m sure that every day everybody from soccer moms to surgeons find themselves at the counter of a payday loan operation asking for a short term loan just to get them through to their next paycheck.

What about credit score?

Usually, guaranteed loans for bad credit no fees are intended for people who’ve had some problems in their borrowing history, whether that means late payments, judgments, bankruptcy, or whatever. People with better credit typically have access to more traditional – more appealing – financing tools, like credit cards.

And it really all comes down to money management. If you’re so short on cash that you have to pay outrageous fees and interest rates, you need to go back over the last six months or so of your financial life and ask the question “What got me here?” Be honest with yourself so you can make sure this instant guaranteed personal loan is your last.

Unsecured Loans for Poor Credit

Every door in the world of borrowing and finance doesn’t close to you just because you have bad credit. In fact, I’d guess that a high percentage of loans – maybe even 30% to 40% of loans across the board – are given to people that most of the credit world would call ‘credit challenged.’ You have all kinds of loans specifically geared toward bad credit, including home loans car loans, credit cards…you even have unsecured loans for bad credit.

Now, that’s not to say it’s easy to get unsecured loans no credit check. It’s actually going to be pretty tough. Put yourself in the shoes of the lender, and think about what kind of person you actually want to lend money to.

As a banker, you’re looking for somebody to who’s highly likely to pay the money back. Now, given the fact that you don’t know the people who are walking into your lending institution on a daily basis personally, all you can do is work from the most common source of information on a person’s track record – their credit score. But in the case of unsecured loans with poor credit, you don’t even really get to use that. Folks looking for these kinds of loans look bad on paper.

The whole problem is that the big banks employ huge teams of statisticians who build massive actuarial tables, and the job of those tables is to say “given this person’s credit score, how likely are they to repay a (for example) $1500 loan?”

For a bad credit borrower like you, those actuarial tables say “he’s not very likely to make his payments on time, if at all.”

So how is the banker going to lend you the money? He has to do something to make sure his overall lending practices stay profitable, so the only way he can give you an unsecured loan for poor credit is to change what those tables say, and he does that through high interest rates and fees.

See, what they do is look at the repayment patterns of all borrowers of approximately your credit standing (aka not so great) and they look at what percentage of the time they bail out on the debt. Once they have a pretty good idea of the default rate, they raise the interest to the point that the interest paid by those who do make their payments more than covers the lost money on those people who flake. Make sense?

So, if you do happen to qualify for bad credit personal signature loans, you’re going to be offsetting the costs of other people’s unwillingness to pay their debts. It’s not ideal, but I guess you do what you have to.