No Credit Check Unsecured Loans

Anybody who ever applied for any kind of loan would love to have the bank skip the credit check. The whole situation can be very uncomfortable, right? You have to give them all this personal information about yourself, including your social security number (and who feels safe doing that?), and then they click a few buttons on the keyboard…so they can come back and say that because you missed one car payment in 1994 they’re not going to approve you for the loan you really need. I say no thanks. I’d much rather have no credit check unsecured loans.

The great thing about an unsecured loan with no credit check is that a) they’re not going to even bother looking at your credit as part of deciding whether you’re qualified, and b) the loan is unsecured, so you don’t have to provide any form of collateral whatsoever.

Alright, we just have to be real here. If you think you can get a loan with these characteristics you’re a little loopy, and that’s putting it kindly. What you’re essentially saying to the bank is “Give me a loan based on nothing but my good looks and handshake.” You’re asking them to lend you money when you’ve clearly left some other lender with zilch in the past – that’s how your credit got messed up in the first place.

You either don’t want to provide any collateral, or you don’t have any to offer them – so it really comes down to you asking the lender to trust your best intentions and completely ignore your past transgressions. Do you think that’s a fair proposition?

Now, I’m being a little hard on you – the truth is there are loans out there that at least resemble a no credit check unsecured loan, but a better name for them is a bad credit payday loan. And it is possible to get those. I’ll tell you now that you’re not likely to get more than a few hundred dollars through these loans, and you’ll pay handsomely in the form of up front fees and steep (like Everest) interest rates.

If those are things you can handle than these loans are probably what you’re looking for.

Bad Credit Unsecured Personal Loans

Running out of money before you run out of month is a very stressful thing to have happen in your life. We’ve all sat and watched TV commercials for payday loans and thought judgmentally “that will never be me.” But…then your car breaks down the same week your kid breaks his arm at school the same week rent is due…and next thing you know you’re online looking for bad credit unsecured personal loans.

And it’s not a great feeling, but you’re just doing what you have to do for your family to get by. For those of you who don’t know, an unsecured personal loan for people with bad credit is very similar to a payday loan in a few ways:

1. It doesn’t require any collateral.

2. People with no credit or less than perfect credit can apply and have decent hopes of getting approved.

3. The loans are meant to have very short terms – usually less than one month and often just a week or so.

One semi-myth is that you can get instant unsecured personal loans. Sorry, I don’t think that’s going to happen for you. If the loan is unsecured, that means the lender is completely exposed to the risk of you disappearing without making any of your payments, let alone the full balance. Yes, they can protect themselves to a certain degree by charging you a healthy fee before your loan gets disbursed, but that only covers them so much. They’re going to want to check your credit just to see how much of  a risk they’re really taking.

I hate to say it, but people with good credit will always be at an advantage over people with wrecked credit. Take some steps to improve your credit. Ironically, the steps you’ll have to go through to improve your credit will also improve your overall financial situation. I’m talking about doing things like looking for ways to make extra money, pay off old bad debts, save more, and set up your bill and loan payments on your bank’s bill pay program. If you go through those processes it will be hard for you not to see your checking account balance stay higher and your stress level stay lower.

Low Interest Loans

One of the oldest personal finance maxims out there is “avoid debt.” One of the other oldest is “if you’re going to take on debt, make sure it’s with low interest loans.”  There are plenty of loans out there that don’t require you to pay double digit interest; you just have to look in the right places and have the right qualifications.

I’ll say this though. I’m afraid there are way too many people out there who have foolishly convinced themselves that they’ll be able to get a low interest loan even if they have terrible credit, no income, and no credit history – all they have to do is keep looking at websites until they find the one that says “Yes – we’ll loan you lots of money even though it would be incredibly stupid for us to do so!”

Just kidding. Well, partly kidding. You just might as well come to terms with the fact that you’re only going to get a loan with low interest if you meet a few very strict criteria:

1. You have to have a couple of years of credit history where you’ve had the opportunity to use credit, and you’ve proved that you can use it wisely.

2. Your actual credit score is over 700.

3. You have an income that far exceeds your monthly expenses and your current monthly debt service.

This is one of the great ironies of debt – those people that would clearly need to borrow the money the least are the ones who can easily get low interest rate loans the most esaily. Those that need to borrow the money the most are the least likely to qualify for the attractive loans. I’m sure there’s some profound life lesson in there.

What kinds of low interest loans are there?

All kinds, actually. Well, almost all kinds. Obviously you have your low interest home loans, low interest auto loans, student loans, etc. One thing I don’t really believe exist are low interest personal loans, although there are plenty of people hoping and dreaming to find them.

The moral of the story is you need to prepare yourself to be the kind of borrower that would qualify for an attractive loan. You need to manage your money and your credit wisely. Borrow no more than you need, make your payments on time, and put the credit agencies on your side. Soon you’ll have lenders beating a path to your door.

Bad Credit Small Business Loans

I’m an entrepreneur myself, and I have a real passion for seeing small businesses succeed. You always hear the statistics that say that 90%+ of small businesses fail, but you rarely hear why. I can tell you that small businesses fail much more often due to lack of cash flow than any other reason. That’s why small business owners spend so much time looking for bad credit small business loans.

The tough part is the fact that small business loans with bad credit don’t really even exist. At least not in the sense that you’re probably thinking of them. Think about it – small business financing is really tough to come by even if you have stellar credit and a successful business running already. Banks are just very leery of giving loans to small business that are just trying to get their legs under them.

Small businesses do have other opportunities for financing though. An up and coming resource is called business cash advances. Here’s what you need in order to be a good candidate for a business cash advance:

1. Your business has to accept credit cards (not just credit cards, but that has to be one of the forms of payment you accept).

2. Your business has to have some revenue, usually at least $1,500 to $2,000 in monthly receipts.

3. You must be able to provide a history of your sales receipts, specifically credit card receipts that go back the previous three months.

4. Your business needs to already have celebrated its first birthday.

If you qualify for a small business loan with bad credit (or business cash advance) you’re going to be able to essentially borrow up to a million dollars against your future sales, depending on your current sales. In other words, they’re not going to lend you $500,000 if your business is only doing $5,000 per month in sales.

These cash advances sound great, but how much do they cost, right? I don’t want to be paying credit card interest on these programs.

Of course you don’t, and I can’t say for sure how much interest you’ll pay. I’m sure most of the finance companies who provide these services charge a percentage of the cash advance, and they probably offer some kind of discount on higher amounts.

The best part of these cash advances is they’re totally unaffected by any bad marks on your credit score. These folks run their business strictly on the basis of your gross monthly receipts, and this is the closest thing you’re going to get to small business loans for people with bad credit.

Poor Credit Auto Loans

You have bad credit, but you need transportation and your current clunker just isn’t getting the job done. You need poor credit auto loans, and you probably have several questions on your mind. Hopefully this article gives you some insight. You’re wondering ‘how much can I qualify for?’ ‘what interest rate will I pay?’ and ‘will my current debt load be a factor?’

I’m sure you can understand why there’s no clear answer to these questions. Quite a few different factors determine how much a lender will offer you. They include:

a. How bad your credit really is, because there are varying degrees of ‘poor credit.’ Have you been through a divorce? Was it an injury or illness that caused you to miss loan payments and consequently damage your credit? Did you unexpectedly lose your job? If the circumstances surrounding your drop in credit status were beyond your control, some lenders may be able to offer you auto loans for poor credit with special circumstances. After all, they’re going to treat you differently who just stopped making payments because they bought more car than they could afford, for example.

b. Your stable gross income, especially as it compares to your credit rating. If you earn a lot of money (say $75,000 per year or more), and you have bad credit, your chances are going to be better than if you have bad credit and low income. The higher your income, the less your credit matters. Lower income, the more your credit matters.

c. The total amount of your other debt, as well as your monthly payments. Most borrowers are accustomed to having lenders look at the new loan payment in addition to their existing payments, considering the total as a percentage of your income. If you total loan payments are more than 25% to 33% of your monthly income, and you already have poor credit, getting an auto loan will be tough.

Auto loans for poor credit are tricky business, but if you persist and shop several loan providers, you’ll get the loan you need to buy the car you want.

Low Interest Home Loans

Fractions of a percentage point on your mortgage rate can mean saving tens of thousands of dollars in interest ove rthe life of your loan, so it’s definitely worthwhile to hunt for low interest home loans. Of course, lots of factors go into whether the loan you’re looking for exists, and whether you qualify for it.

There are two types of loan we’re talking about here. First, you have the homeowner who already has a mortgage and is looking to refinance into something with a lower interest rate. What are the factors to consider here?

Above all else, this is a matter of timing. If you want a low interest home loan you need to be watching the rates like a hawk. Working with a savvy mortgage broker will help with this part of the process – once you have all your qualifying paperwork taken care of and it’s been through underwriting, you really just need to work with someone who has a good sense of the direction rates are heading. This is one part of the mortgage process determined by the Fed and the free market – no amount of down payment, proof of income, or Fico score will make a shread of difference beyond  a certain point. So keep your eye on the rates, and lock it in when the day’s rate sets you up with the lowest possible monthly payment.

But what about that qualification process? If you’re trying to refinance, the underwriters are going to be almost completely hung up on two questions:

How much equity do you have in your home?

What’s your credit rating?

They’re not as concerned with your income (although they will verify it). The thing about income with a refi is you wouldn’t be doing it if your payment wasn’t going to go down, and they’re assuming you can afford your currrent payment.

Equity is a funny thing. Whether you’re looking to refi your entire loan or just open a low interest home equity loan, the amount of equity you get credit for is somewhat subjective. The standard way of valuing your home will be to look at the sale prices of comparable homes in your area sold during the previous weeks and months. They’ll tell you how much your house is worth, subtract the amount you owe, and there’s your ‘equity.’  You better hope it’s a positive number.

If a bank is going to let you refi they’ll want you to have at least 20% equity compared to your loan amount. I’d strong encourage you not to take new cash out, even if you have ‘extra equity.’ Talk about the perfect way to stay in debt till the day you die.

So that covers people looking to refinance with a low interest home loan.

What about new home buyers?

It’s really not too different. Bring a 20% down payment and a 700+ Fico score to the table, and you’ll be in good shape. Happy house hunting.

New Home Construction Loan

In 2006, my wife and I built our first home. It wasn’t a custom home – we built in a subdivision that had been created by one of the major builders in our area. Our new home construction loan was taken care of by the builder, and it was a very simple process. We like our home, but we’re afraid we’ll outgrow it within the next couple of years and it will be time to build again. We’d like our next home to be custom, so we’re going to have to educate ourself on the construction financing process. I’ve learned a few things so far.

First of all, construction loans on new homes usually fall into one of three categories:

1. The builder finances the home. Most builders of any size have relatively large lines of credit with banks that let them build the homes. When they complete the home the buyer is required to obtain a home loan on their own, and that loan is used to pay off the builder’s line of credit, as well as giving him his profits on the project.

2. The home owner takes responsibility for all financing, including the money to build the home followed by a permanent loan when the home is complete. In this situation the home owner seeks out a lender (usually a traditional bank, but I’ve seen people get private lines of credit from wealthy people as well) and secures a line of credit that will cover the amount of the construction. It’s rare that the bank will turn over the entire amount of the estimated construction cost at once; the home owner will usually draw on the line of credit as needed throughout the construction. They write checks on the line of credit to pay the builder as necessary.

Once the home is complete the home owner will have gone through a separate application process for a permanent mortgage (e.g. a 30 year fixed rate loan, etc), and when that loan closes the proceeds will go to pay off the short term construction line of credit.

3. Some lenders are set up to provide combination construction and permanent home loans. Meaning, the line of credit is drawn upon during the construction process (and ususally at a higher interest rate than the permanent loan will be) until the home is ready to live in. At that point the same bank will convert the loan to a permanent interest rate, and essentially ‘pay itself off.’

However you choose to finance your home construction loans, make sure you’re careful at every step in the process. When a bank gives you a blank check in the form of a construction line of credit, it can be very easy to make improvements on the fly, causing your home price, and your future mortgage payment, to balloon. A conservative approach to building your home will leave you with less stress in the long term.

Poor Credit Home Loans

Unless you live in a cave you know that the whole home buying game has changed completely. Gone are the days where anyone with a pulse can borrow almost any amount to buy a home with no real scrutiny of their ability to repay that loan. And thank goodness. I think we’ve all seen that such loose lending practices put us all in a tough situation in America. A return to to conservative lending practices may not be as fun in the short term, but it keeps us all healthier in the long term.

But is the dream of home ownership dead for people whose credit has been damaged? Actually, no. Poor credit home loans still exist, and they always will. But if you have bad credit and you’re determined to buy a home, be prepared to run the gauntlet with the banks before you sign the closing documents and receive the keys.

I believe the home loan qualification process will take on a much more personal feel again. I can see more and more situations where prospective borrowers go to their local bank or credit union and go through a relatively extensive interview process with mutliple loan officers. After all, on paper these bad credit borrowers don’t look good. So if they’re going to get a home loan for poor credit it’s going to be because they can convince a lender that their past is not a reflection of their commitment to being healthy borrowers going forward.

Here are a few things you can do if you really want to qualify for a home loan for people with poor credit:

Show the bank you’re taking obvious and meaningful steps toward improving your credit worthiness as well protecting your ability to make your mortgage payment on time, every time. For example, have you sold off some of your debt? Have you unloaded that expensive SUV and traded it in for a smaller, more economical car? Getting rid of your expensive cars will not only improve your debt to income ratio, it will show the lender that you’re committed to making your mortgage payment a high priority. The same would be true for credit card balances. If you have consumer debt on things like furniture and electronics, sell them off as fast as you can. You want to show the bank that you can make sacrifices in order to have a home.

Be patient. Unfortuntely, going into debt and ruining your credit take very little time compared to what it takes to get out of debt and improve your credit. Are you willing to follow a path of discipline and sacrifice for the next two or three years (or even five years) so you can own the home you’ve dreamt of? I hope you can see a day in your future when poor credit home loans aren’t even a consideration for you.

Student Loans with No Credit History Required

I clearly remember sittting in a classroom in college with ten or fifteen other students and a financial aid staffer on the day my first student loan was disbursed. For 30 or 45 minutes he talked to us about how we really should minimize our loan amounts, only borrow what we absolutely need, etc. I remember being a little nervous; I guess that was the goal they were trying to accomplish. I received about $2,500 that day, and true to the financial aid guy’s prediction, I ended up taking about $13,000 more in student loans before I left school a few years later. I guess that’s the risk of student loans with no credit history required.

The reality is student loans rarely require you to have much credit history. Schools and lenders know that the average 18 or 19 year old kid, fresh out of high school, isn’t going to have much of a past as far as credit is concerned. I can’t even remember if they checked my credit when I got my loans. I’m sure they did, but my guess is these schools are running credit checks more to see if you’ve done anything horribly wrong than to see what you’ve done right. As long as you don’t have any major disasters on yoru credit report they’re probably going to give you at least some student loans with no credit.

Your problem will come if you need to borrow a lot more than would be normally available through standard Stafford loan programs offered through universities. If you need to go way above and beyond those amounts, I’d advise taking a step back. Have you heard all the stories on the news about college grads moving back in with mom and dad because the job they get out of school isn’t enough to cover their cost of living and their loan payments?

Nothing seems more ridiculous than a person majoring in something like literature or politicial science and then going deep in debt when they’re only real career aspirations are to work for a non-profit. Some common sense needs to come into play here. Do some research on how much your loan payments will be for a given amount of debt, and then decided whether your expected salary will go as far as you need it to. And by the way, be reasonable about your ‘expected salary.’ It’s better to be conservative when you’re using that estimate to decide how much debt you should take on.

The more I think about it, the more I’m wondering whether student loans with no credit check are a really a good idea.

No Credit Check Credit Cards

I’ve always wondered how any credit provider could afford to offer no credit check credit cards. It just didn’t seem possible, given what we all know about how credit is extended. You apply for a credit card, the credit company looks at your income and your credit history, and they decided a) whether to extend you credit, and b) how much to extend. How on earth could they give a person a credit card while completing ignoring the ‘credit score’ portion of the equation?

To answer that question I started doing a little digging, and I found some very interesting facts on no credit credit cards. The reason they’ll give you a $300 credit limit even though you have squat as far as a credit history is their fee structure. This should blow your mind.

I found a table called “Fees for Issuance or Availability of Credit”

Check this out:

Account Set-up Fee (what they’re going to charge the day they give you the card): $29.00

Program Fee (not sure what this means, but I’d guess it has something to do with ‘you have no credit’): $95.00

Monthly Servicing Fee (apparently this is an annual fee that they don’t want to call an annual fee, I suppose because they spread it out over the whole year): $84, paid at $7 per month

So let’s total this all up…and then laugh hysterically at how much they’re going to charge you for your $300 credit limit (okay it might be a little higher or lower, but I’m in the ballpark).

$29 + $95 + $84 = $208 for the first year, and $84 per year after that.

Funny right? Not really.

I guess you could look at this in terms of the ‘cost of establishing credit.’ That does make some sense, and if your long term goal is to buy your own home or even your own car, paying a couple hundred dollars in fees is probably worth it to get your credit rolling.

But make sure you check out alternatives. If you’re a young person you might consider asking your parents to add you to one of their credit accounts for a while. I’m not even saying they should let you use their credit card – just put you on their account so the credit agencies start to get some information about you as a credit holder. Of course, you’d only want to do this if your parents kept their credit squeaky clean. This whole thing would backfire if your parents were making late payments right?

As always, I’ll finish by saying that you should use credit very conservatively and very wisely. Credit card debt is a miserable thing. You don’t need the stress, so stay clear of it.

Loans for People with Poor Credit

Many, many of us are dealing with a damaged or demolished credit score right now. We got in over our heads with too much car, or too much house, or too many nice clothes, or whatever it was – and now we’re staring at sub-600 FICO scores. But that doesn’t mean we have no need for borrowing money in our lives anymore. We actually might need a little borrowing power now more than ever, and that’s why we’re on the hunt for loans for people with poor credit.

There are actually all kinds of loans for poor credit, there’s a whole subset of the lending market dedicated to helping out people just like you and me who made some mistakes with borrowing money in the past. Here are just a few of your options as a damaged credit borrower:

Home Loans for Poor Credit

If you’ve hurt your credit score, but you’d still like to borrow money to buy a home, or refinance the one you have, you’ll need to find the right kind of lender. These kinds of loans are available, and they usually carry much higher interest rates than traditional home loans.

Car Loans for Poor Credit

I once knew a guy that owned a used car lot where they sold almost exclusively to people with no credit at all, or very bad credit. Many of his customers were undocumented immigrants who didn’t have a social security number, let alone a FICO score or well established credit history. He ran a nice little business helping these folks get into cars, but he did charge them 18% to 24% interest. I guess they were just doing what they had to do.

Personal Loans for Bad Credit

These are probably the most famous (or notorious) bad credit loans. Around ten years ago you started to see check cashing and payday loan stores pop up all over the place, offering people small loans of a couple hundred to a thousand dollars to help them get to their next paycheck.  These loans are very often borrowed by people who have damaged their credit to the point that normal credit cards or signature loans are not an option for them.

Keep this in mind as you investigate these different types of loans for poor credit. Just because you have bad credit now doesn’t mean you always have to. You could just as well be a credit superstar within the next few years. It’s just a question of committing yourself to managing your finances a little more carefully and reducing your need for borrowing. That’s kind of how credit works – the less you need it the more people want to give it to you.

Poor Credit Secured Loans

Once you’ve messed up your credit it’s no secret that your borrowing options become severely limited – some even thing non-existent. It’s not true, though. If you need to borrow some money and you’ve all but destroyed your credit, poor credit secured loans could be the path you need to take.

All forms of borrowing are a matter of risk and reward on the lenders’ side of things. Every single person they lend money to represents some risk (because there’s a possibility the person won’t repay the loan…or even make their payments on time), but also some reward (because if they do make their payments and repay the loan the bank will get its money back plus the interest on the debt). A bank stays in business and turns a profit by giving out loans to people that, on average, are going to repay the principle plus the interest.

And you – with your damaged credit – represent more risk than reward, so you need to tip the scales in your favor. That’s why you’re looking for secured loans for poor credit. By offering the bank some additional security, you’re reducing the risk you represent to them, and increasing their view of the potential reward.

What can of security do you have to offer? A person borrowing a poor credit secured loan will often use their car as security, or collateral. If you have a car that’s free and clear – and worth something on the open market – a bank can take the title of that car as collateral on your loan. If you disappear without completing your repayment, the bank can sell your car to recover their lost money, or at least part of it.

And how do they value your car as a piece of collateral? Usually they’ll look at the Kelly Blue Book value. So although you might feel your car is worth $2,000, if Kelly says it’s worth $1,200 then that’s exactly what the bank will say it’s worth in terms of collateral on your loan. Are you starting to see how these statistics (things like Blue Book value and credit score) can make or break your borrowing power?

Of course, cars aren’t the only collateral you can use to get a secured bad credit loan. You could use anything valuable, like jewelry or other personal posssessions. All that matters is your ability to show the bank that they have nothing to risk by lending you the money.

No Credit Auto Loans

I didn’t buy my first car until I was 21 years old, and I didn’t have enough money to pay cash. That meant going to my parents’ credit union and trying to qualify for a car loan. I did have some credit established at the time, but not enough for the credit union to feel comfortable giving me a no credit auto loan. My parents had to co-sign on the loan.

But what if you don’t have parents (or some other relative) that can co-sign on your loan? Will you be able to find a lender who offers no credit check auto loans? It won’t be easy, but if you can find the right bank, you better be ready for some ‘creative’ financing.

Most of the time these kinds of car loans are going to be offered at the dealerships themselves. You’ve probably seen signs waving outside used car lots all over the city where you live screaming ‘no credit? no problem!’ They’ll lend you the money alright, but it’s going to come at a price.

I used to have a friend whose family got into the used car business and I got to watch closely how they operated. None of the people they sold cars to would be considered traditional or A-class borrowers. These were people that no bank or credit union was going to touch. My friend and his family regularly gave people loans to buy cars and charged them upwards of 21% interest. Can you imagine paying credit card interest rates on a car loan? Well, if you need a no credit auto loan that’s what you’re going to be up against.

The only advice I can really offer is to look long and hard for a person who could co-sign your loan. It will probably be the difference between paying double-digit interest and paying in the neighborhood of 7% interest.

This is a loan you’re probably going to have for three to five years, and that big of a difference in the interest rate will save you hundreds and hundreds of dollars.

Credit Cards for People with No Credit

When I was 18 years old I had no credit score and no credit history whatsoever. Without my knowledge, my parents added me to one of their credit card accounts, and as they continued to properly use their credit, my credit automatically improved. I’m not sure most people are as fortunate as I was, and they’re faced with searching for credit cards for people with no credit…and no one to help them out.

The first thing to keep in mind is you have nothing to get discouraged about if you don’t have any credit right now. Credit card companies keep very detailed statistics about how much every new card holder will be worth over their lifetime. It’s in their best interest to extend you credit cards with no credit. Here’s how they’ll do it:

They’ll start you small. Since card providers know what you’re likely to pay in term of fees and interests over the life of your membership with them, they’ll start you out with a limit in the neighborhood of $250 or $300. Enough that you feel like you can actually use your card for day to day living, but no so much that one irresponsible weekend could put you at risk of taking on a balance you have no hope of repaying.  By the way, I’m convinced that every credit card holder will, at some point, mess up and max out his card. It seems to be something we all have to go through just to learn how unpleasant it is.

After you’ve had your card for a while, the card provider will probably bump your limit a little, from maybe $300 to $500, then from $500 to $1,000, then from $1,000 to $3,000… and so on. That’s how I ended up with credit limits in excess of…well, let’s just say I’ve got some high credit limits.

You just want to make sure you’re very careful with your credit cards with no credit. As someone who’s made the occasional stupid mistake with his cards, let me tell you that it’s brutally difficult to get out of credit card debt once you’re in it. Credit cards are best not used at all, but if you have to use them you really want to make sure it’s something you use for convenience and pay off at the end of every single month. That’s a cliche you hear over and over again but it’s painfully true. Credit card debt is literally the devil, and should be avoided at all costs.

Payday Loans with No Credit Check

Short term no loans obtained through payday loan stores and websites have gotten quite a bad rap over the last couple of years, but no one can deny that they fill a certain need in the market for people who need some fast cash and don’t have the income or the credit score that will stand up to much scrutiny. There are still plenty of people who need payday loans with no credit check.

You might wonder how a loan provider can afford to offer no credit check payday loans. Well, they clearly have to make sure their risk is covered, because it’s true that they can’t be lending money without a high expectation of having that money paid back. They cover most of their risk through the use of up front fees the borrower must pay before they walk out the door. So, when the borrower walks into the loan store and asks for a certain amount to be lent, the lender will usually ask them to pay a percentage of the loan up front – out of pocket, not from the proceeds of the loan. That percentage may be anywhere from 8% to 15% of the loan amount.

The lender’s risk equation looks something like this: if they lend 100 people $300, but charge all of those people $30 before they ever walk out of the loan store, that means they’ve lent $300,000 but already received $30,000. So they have $270,000 at risk. They know that a certain percentage of those borrowers will default, but in the end they know that enough people will in fact repay their debts in order to return their money to them and ensure a healthy profit. Some say it’s too healthy a profit, but that’s up for debate. I say it’s a fair transaction given the fact that these borrowers know exactly what contract they’re entering into.

And speaking of you, the borrower, be extremely careful in how you use these loans, because the fact is that a payday loan for $300 could end up costing you more than double that by the time you pay your fees and interest. So don’t fall into the trap of rounding up. If you need $225, don’t borrow $250. If you need $175, don’t borrow $200. It’s that kind of careless behavior that got you into this situation in the first place. Manage your money better and live debt free, without payday loans no credit checks.

Paying Back Student Loans

It’s funny…when we were all in school, sitting in class, stressing over tests, hanging on the weekends…we racked up all that student loan debt thinking “it’s no big deal, my first job will pay well and I’ll have these loans taken care of within a year or two.” For some of us that ended up being true, but for others it didn’t quite work out that way. But let’s not think about the negative side of things. You’re out of school now, you’re working (let’s hope) and you’ve got to pay back student loans for the next ten to fifteen years.

That is unless you get on some kind of accelerated debt repayment program. Well, actually let’s back up one step. Hopefully when you got out of school your first step was to go through the proper student loan consolidation process that got your interest rate down to 2 to 3%. I think the interest rate on my loans is somewhere in the neighborhood of 2%, and my monthly payment is about $97 on total loans of around $15,000.  I’m not crazy about that debt, but my $97 payment isn’t exactly crushing me.

So once you’ve consolidated, what’s the fastest and best way to get those loans paid down?

Maybe the first question we should be asking is whether it paying down student loans more quickly even makes sense. Think about it – if you do in fact have yourself locked in at an interest rate of 2% or lower, it’s likely that you could earn more than 2% on a savings account. In other words, you’re earning more interest than you’re paying. As long as that’s true? Why lose money by paying back your student loans more quickly?

There are a couple of schools of thought here. On the one side you have the hard core believers in ‘leverage.’ In other words, why would you pay off your loans early when you’re earning more interest than you’re paying, as we just discussed. On the other side you have the debt-haters who say that people who believe in leverage are usually just people who live their lives buried in monthly payments and losing sleep as they stress over those payments.

Five years ago, I was in group one. Five years later, I’m much more in group two. I hate monthly payments with a passion. They do nothing but stress you out and rob you of your peace of mind and creativity. I’ve never met a person who regretted being completely debt free, but I’ve met plenty of people who wish they had no debt. Pretty simple, right? I guess my point is that you should set up a system that disciplines you and gives you help paying back student loans early. You might have to sacrifice some extra money for a few years, but when you’re payment free you’ll feel like the smartest person in the world.

Auto Refinance for Bad Credit

Let’s not kid each other. We both know why you’re looking for a bad credit auto refinance loan. I’m guessing it went a little something like this:

A couple years back you started a new job, and it paid double what your previous job was giving you on a monthly basis. Suddenly, you decided that income was bullet proof and it was time for you to start living the life you had dreamed about and so obviously deserved. You went right out and bought a $60,000 SUV and immediately put $5,000 worth of rims and tires on it, not to mention the aftermarket entertainment system. You never felt cooler pulling up to your weekly softball game with your buddies; you were finally living the dream. But oops – the dream carried a $1200 monthly payment.

Next thing you knew, things started to go a little sideways at work, and you missed a couple of those $1,200 payments. You went from being Mr. Shiny Credit to  Mr. I need an auto refinance for bad credit. Not too fun is it?

So what are your lenders going to be looking for when you try to get that refi done? Well, first of all they’re going to want to look at your overall debt profile. In the months since you started missing payments what have you done to improve your situation? Have you paid off any of your consumer debt? Have you reduced your overall debt at all? Has your income stabilized?

These days your lender will probably want to see at least three or four of your most recent pay stubs, and if you’re a commission-based earner they’ll want to see even more than that (after all, any salesman can have three or four good weeks. I’ve been there).

Once you’ve shown that you actually produce enough money to keep your payments current after you go through the auto refinance with bad credit, you better prepare yourself to see a pretty gnarly interest rate. I’m sure you understand that being a bad credit borrower you’re now facing double-digit interest rates at a minimum. It’s not out of the question to pay over 20% on your car loan after the refi. Can you handle that? I guess you don’t really have a choice.

Hopefully you’ve learned this lesson in life: those that create the appearance of having the most money very often have nothing except the most debt and stress. People who choose to live life driving used cars in and living well inside their means may not look like much, but they have more fun and they sleep better at night.

Small Personal Loans

Nobody wants to be in a situation where they need personal loans, but the fact is it happens. All these Payday loan operations are in business and profitable because the market obviously exists. Most of the time people are borrowing amounts in the neighborhood of  $300 to $500, but what if you’re only looking for small personal loans?

These smaller short term loans are available; you can borrow as little as $50 or $100, and the fees will be correspondingly small, so that’s a relief. The application and qualification process will be similar to what you’d experience with larger loans: the lender will expect to see proof of income (in the form of recent paystubs or a w2), and they’ll probably run a credit check to make sure you don’t have any major blemishes on your credit history. So what if you have terrible credit?

That’s probably not too big of a deal. If there’s one thing personal loans providers are used to it’s giving people small instant unsecured personal loans for bad credit. The downside is they’re going to make sure they get their money one way or the other – and that means fees. Sure, a $15 fee on a $75 loan may not sound like a lot, but it’s 20%, and you could end up paying interest on top of that.

Before you ever go into a loan store and fill out an application, it’s probably wise to ask yourself a few questions:

Do I really need this loan? Is there any way I could cover this expense without having to borrow this money?

Am I sure I’ll be able to repay the loan? What circumstances put me in this situation? Can I reasonably hope to repay this loan and not have a similar circumstance arise in my life?

It’s crucial that you realize how you got where you are, and do everything possible to avoid being back at the payday loan store three months later applying for another small personal loan with bad credit.

Credit Cards for Poor Credit

It’s hard to get much done in modern society without credit. You can’t buy a home, you can’t buy a car (unless of course you have a bunch of cash on hand), and in many cases not having credit (or having bad credit) will stop you from getting satellite TV or even a cell phone. So, if you’re a person with a bruised FICO score and a desire to turn things around, you’ll need to check out credit cards for poor credit.

There are a few ways you can go here. The simplest way to think about getting a poor credit credit card is to just have your parents add you to one of their accounts. When I was 18 my parents put me on one of their accounts (I didn’t even know they did it) and by the time I was 21 I actually had fairly good credit and a decent credit history for prospective lenders to look at when deciding whether to let me borrow any money. Thanks to my parents’ foresight I was able to get my first car loan at the age of 22. They did have to co-sign on the loan, but a short time later I was able to get my own loans no problem

Of course, that’s kind of an odd way to think about credit cards for people with poor credit.  What people are really looking for is a credit card provider who will give them a low limit credit card they can work with for a while in order to improve their standing with the credit agencies. These are most often going to be secured cards, because  a bank isn’t going to hand over an opportunity for you to make your situation worse (you’ve already done that, right?). What they’ll do is give you a secured card with a low limit, and then you’ll have the opportunity to use it and pay it off. Eventually your card provider will give the good news to the credit agencies and your score will slowly climb.

Ironically, carrying a small balance on your card for a few months, and making regular minimum payments, will go further toward improving your score than paying it off in full every monthy would. You see, lenders want to know that you can manage debt as much as they want to know you can manage credit. Does that make sense? Paying off your balance every month proves you can manage your credit. Carrying a small balance month to month and keeping the payments current shows you can manage your debt. Since a home loan or car loan isn’t something you can just pay off at the end of the month, you can use your credit cards as a way of proving that your ready to wisely use the bigger debt instruments. Think of the interest you pay as the cost of improving your credit to the point that you’ll be able to buy a nicer can and someday afford a home.

Business Loans for Poor Credit

Starting the business is the American dream. Well, it’s my American dream. It has been since I was a young kid – probably 12. I want to run my own shop, manage my own time, and have my customers be my only boss. There’s only one problem. Starting a business takes cash – cash I don’t have. So my options are to borrow money from friends, family, or the bank. My credit is no good and my friends and family are just as broke as me – so I have to hope I can find a bank that offers business loans for poor credit.

One thing is for sure – if a bank is going to lend me any money at all given my damaged credit, I’m going to have to make a pretty compelling case that I’m not a huge credit risk, even if that’s what the statistics say about me. I think if I put the right pieces together I’ll be able to get the poor credit small business loan I’m looking for.

Number one, I need a rock-solid business plan. Before I walk in to that loan officer’s office I’m going to make very sure I have my plan and my presentation nice and polished. I’ll be able to show him that I have a product for which there is a sizable market, an intelligent and efficient plan for getting the word out about my product, and conservative but encouraging projections of cash flows during the first 12 months I’m in business. Of course I can’t elimiate all the risk the bank is taking by giving me a loan, but I’ll show them I’m willing to do whatever it takes to make my business work – I’ll give up food, sleep, and a social life in order to watch my baby grow.

Of course it won’t be easy. The vast majority of traditional banks have no interest in giving business loans with poor credit. They’re looking for people with an immaculate credit history, collateral, and even a business that’s already cash flowing before they’ll be willing to lend a single dollar.

That’s why if you’re in the same situation as me you might want to consider looking for a private lender. It won’t be easy, but if you can find a person with some decent liquidity and an entrepreneurial spirit you may find they’ll be willing to take a  calculated chance on you and lend you the money to get off the ground. At the same time, they may not see the benefit of lending you the money (since you’re considered a credit risk). If they really believe in you and your product they may only want to give you the money as an investment and take a percentage of the business in return.

However you raise the money for your business (whether it’s through a poor credit business loan or an investor), never give up on your dream. America needs more committed entrepreneurs to help our economy thrive in the long term.