Banks that Lend to People with Bad Credit

The credit crisis isn’t the headline it was a couple of years ago, but the effects are still being felt by the average loan applicant. When the economy nearly collapsed in 2008, millions of people saw their credit limits cut by a big percentage, but surprisingly that’s not what crushed the average fico score.

As more and more people found themselves jobless, they’ve had a tough time keeping up with car and home payments, and that’s where you’re credit score gets decimated. If you’ve missed payments and seen your credit score end up in the tank, you’ll be looking for banks who lend to people with bad credit the next time you need to borrow money.

A List of Banks that Lend Money to People with Poor Credit

LendingTree – has plenty of options for bad credit car loans and personal loans.

Bank of America – also offers a variety of subprime car loans, credit cards, and even loans for boats and RVs.

Wells Fargo – possibly not as flexible, but still worth investigating if you need a bad credit loan.

Regardless of which bank you’re looking into, it’s important to understand what kind of loans – at what terms – are going to be available for people with low fico scores.

Here’s a short list of loans you can get from banks for people with bad credit:

  • personal loans – usually offered in amounts ranging from $500 to $1,500, these loans carry some of the highest interest rates in the world of finance.
  • car loans – you can often get the car you want, but your interest rate may approach credit card levels.
  • home loans – in spite of the subprime lending mess, first-time borrowers with a down payment still may be able to get into a home, although (as with the other types of loans) the rates will be much higher than those paid by good credit borrowers.
Almost every bank out there has loan programs for poor credit borrowers. They’re likely to make you jump through more hoops, and the terms aren’t going to be favorable, but you’ll usually end up with the loan you want. The key is to get into a habit of making payments on time so you can rebuild your credit score and start taking advantage of traditional “prime” lending options again.


A Quick Guide to Refinancing Your Mortgage

People refinance their mortgages for different reasons. The main reason why you would want to refinance your mortgage may be a low rate of interest. The low rate makes for low monthly payments and that means more available money in your pocket.

Some people decide to refinance their mortgage in order to switch from a variable interest rate to a fixed interest rate. Variable rates, being dynamic, can quickly adjust to a high rate that produces a high monthly payment. This can create problems if your cash flow is tight. A fixed rate of interest is predictable, month-in and month-out; and a much safer way to go.

Regardless of the reasons for refinancing, you must know at least the basic steps of the refinancing process to protect yourself. It’s not difficult but it involves a lot of paperwork and most people have little experience or knowledge in this area. And so here’s a short guide to help.

First of all, you should work with a reputable mortgage broker. Mortgage brokers help you save money in various ways and also they can save you valuable time. The mortgage broker understands the inner workings, offers, and terms of various lenders and knows which lenders have loans that may suit your needs at affordable rates. Try to find a broker through a referral from someone you trust if you can.

Next, you need to start putting all of your financial paperwork in order before meeting the broker. This includes your paycheck stubs, bank records, tax returns (for the past two years), and every creditor record you have. Organize this paperwork so that you can easily answer any questions the broker may have.

Now it’s time to meet with the broker. This is where you can find out what you can afford and what you can’t. After filling out a short application form, the broker will know what types of refinancing deals you might qualify for. Now, it’s up to the broker to find you the best deal according to your requirements.
Once you’re given some actual deals to consider, you should evaluate them side-by-side. Besides comparing the monthly payments and rates of interest, you must also look at the out-of-pocket expenses that you’d have to pay for the loan itself. It’s also advisable to consider mortgage insurance with your refinance. In today’s economic climate it doesn’t hurt to have some extra protection against a financial setback or the loss of a job. Compare the mortgage insurance rate of various insurers and choose the one which is economical and offers the best comprehensive coverage. And don’t forget that through all of this you’re free to bargain over mortgage details and have the broker take back your requests to the lender.

If you plan your refinance in this way, you can save time as well as money. You have to be patient though because the mortgage process can take weeks. But in the end it’s worth it if you get the deal you’re looking for.

Instant Approval Unsecured Loans

If the approval of the loan is instant, it can mean only one thing: a computer is doing the deciding. And if a computer is doing the deciding it means the approval (or decline of the loan) is completely quantitative, not qualitative. What does that mean? It means the computer doesn’t care about your circumstances, your personality, your hard luck story or your 100% commitment to repay. All the computer cares about is whether the numbers work in the bank’s favor. What numbers?

Your Credit Score and History

There is no way you’re going to get an unsecured loan (being defined as a loan that doesn’t require collateral) without a good credit score. When I say good I mean north of 680. And not only does your Fico score have to be high, you have to have a nearly spotless payment history on your other loans during the previous 24 months – at least. So when the computer pulls your credit report it can’t see any “30 day late” or “60 day late” notices.

Your Outstanding Debts

How may credit lines do you have open? Are they revolving credit or secured credit? Secured or unsecured? Meaning, are they credit cards, car loans, student loans, payday loans, a mortgage – what? It’s true that you want a certain number of credit lines active on your credit report in order to qualify for unsecured loans, but if you have too many you can start to look like a credit risk. And just so you know – department store and gas station credit cards don’t help your credit in the least, so you might as well cancel them.

In an instant approval loan situation, you need to make sure you have a few long-standing credit lines open, and ideally they’ll have some activity on them in the last 24 months that proves you’re an active, but very responsible borrower.

If you’ve got the credit score and history, and if you’re total monthly debt payments aren’t overwhelming (in the bank’s eyes), there’s a good chance you can get instant decision unsecured personal loans. But if you don’t have those things in order, you’re going to have to go the more traditional instant personal loans route – I’m talking about payday loans. The ugliest loans in the world, with their egregious interest and fee structures.

Avoid Traditional “Unsecured” Loans if Possible

The problem with traditional payday loans is they will literally approve anyone as long as the person has a pulse, a direct deposit paycheck stub, and an active checking account. That means the burden is  really on the borrower to decide whether it’s a good idea to borrow that money. And take it from me – it’s a terrible idea.  If you can possible avoid taking on that kind of debt, please do.

$5,000 Auto Loans with Bad Credit

You’re looking for $5,000 auto loans for people with bad credit, but the fact is lenders aren’t looking to lend a specific amount. They’re looking to lend as much as possible without taking excessive risk. So let’s look at how a lender would decide whether to give you an auto loan for $5,000.

First, let’s estimate the payment. Now, because we know you have a shoddy credit score, your interest rate is going to be between 11% and 20%. For quick math let’s call it 15%.

$5,000 financed at 15% for 36 months gives a payment of about $174 per month. The lender already knows your credit is bad, but they’ve offset their risk by charging you 15% interest (or more). The only question remaining is whether you can handle another $174 in monthly debt service. To make this decision they use a ratio of the sum of all your current debt payments compared to your monthly gross income. What ratio are they going to want to see? It’s hard to say because it varies so much by lender. Some lenders care a huge amount about your income; others don’t care as much because an auto loan is a secured loan – meaning they can repossess the car if you default (repossessing the car can actually be profitable for them because they get the car back, keep all the money you’ve already paid, then turn around and sell the car again).

But I’d say you want to keep your total payment to income ratio below 40%.

For example:

Your gross income is $4,000 per month (you’ll have to prove that with pay stubs and possibly a letter from your employer).

  • Your mortgage payment on your townhouse is $950 per month.
  • You have another car payment at $250 per month.
  • You have student loans at $150 per month.
  • The minimum payments on your credit card debt is $140 per month.

So before we add the $174 per month for your new car loan, you’re at $1,490 per month.

Adding your $174 for the new loan you’re at $1,664, which is 41.6% of your gross income.

This leaves slightly over the 40% ratio we were shooting for. Does that mean you won’t get the loan? Not necessarily. Like I said, some lenders don’t care a ton about your debt to income ratio. On the other hand, you have to ask yourself if YOU want the loan. You’ve already got credit card debt, student loans, and another car payment. Would it make more sense to hold off on this car? Could you ride your bike or a $500 scooter to get where you need to go? I know it’s not glamorous, but trust me when I tell you that getting out of debt is worth feeling a little nerdy on your scooter. Think it over.


No Credit Check Auto Loans with Repo

Listen closely. It doesn’t exist. There’s no such thing as a no credit check auto loan, with our without a repossession on your record.

Of course, that doesn’t mean you can’t get financing. You’re operating under the assumption that because there’s a repo in your recent past a lender won’t touch you. That’s not the case, but that doesn’t mean they’re not going to check your credit before they give you a loan. Why is that? Because your credit goes beyond just your Fico score (which I’m sure is pretty awful, but don’t feel bad – that’s just about everybody these days). Prospective lenders are going to look at your credit history to get an idea of whether they should treat you as anything other than a really bad credit score.

They’re going to look at:

  • how much credit you’ve had in the past (both number of credit lines as well as total available credit on things like credit cards, etc)
  • how many late payments you’ve had on those credit lines (although typically they’ll only go back 24 months)
  • what your current outstanding balances are (including judgments, active credit lines, home loan, etc)

Make no mistake, if someone gives you an auto loan (even relatively small $5000 auto loans) after you’ve had a repo, they’re going to stick you with some ridiculous interest rate. I’m talking upwards of 20%. But that doesn’t mean they won’t give it to you at all. They likely will give it to you. But before they do, they’re going to look very closely at your provable income and your current monthly payments on other loans.

After all, whenever you had your repo, it wasn’t because you were flush with cash and just decided to stop making payments, was it? Probably not. Whether it was unemployment or some other emergency cash issue in your life, you didn’t have the money to stay current on your car payment. So the big tow truck came in the night and hauled it off to auction.

Here’s what your new lender will need to see:

  • most likely at least 30 days of pay stubs
  • a letter from your employer (on company letterhead) saying that not only are you still working there, you will continue to be employed by the company for the foreseeable future

Once you’ve proven the income, the lender will add your new payment to existing loan balances, calculate the total payments as a percentage of your gross and net income, and make a decision about whether you can handle the payment. If he feels like you’re likely to make your payments on time, he’ll give you the loan and courteously charge you 23% interest on it. And if you’re dumb enough to default again, he’ll repo your car, keep all the money you’ve already paid him, and sell the car to somebody else who’s on the hunt for no credit check auto loans after their repo.

Lending Tree for Bad Credit?

“Banks Compete. You win.” Right? That’s‘s catchy slogan. The question is, do banks compete for your business if you have bad credit?

Not as aggressively, it’s safe to say, but there interest to compound and fees to charge on loans made to people with low Fico scores. So yes, I’d say banks may still want to compete for your attention, and Lending Tree may be the place to do it.

What kind of loan are you looking for? Lending Tree is probably best known as a mortgage company, but they offer all different kinds of financing, from auto loans to student loans, all the way to personal loans.

Lending Tree Bad Credit Personal Loans

You have to dig a little, but they do offer personal loans. Here are a few of the details:

  • minimum loan amount is $1,500 (unless you live in Arizona or Tennessee – then it’s $1,000).
  • you can apply for a revolving line of credit or a one-time loan with a repayment term of 12 to 60 months.
  • if, and when, you’ve declared bankruptcy will be factor in your approval and loan terms
  • you can apply with a spouse or other co-borrower.
  • they’ll want to know how many outstanding debts you have (that’s the number of loans, credit lines, credit cards, etc – as opposed to the amounts of those loans).
  • They’ll ask you to rate your credit on a scale of Poor to Excellent (no point fibbing, you know they’re going to check your credit score). I’m sure they ask you to declare your credit status so they know which loan providers could potentially work well with you.

If you’ve damaged your credit with late payments or bankruptcy, it won’t automatically preclude you from getting instant approval unsecured loans through Lending Tree. Countless Payday loan stores and websites prove there are providers ready to help you out. The question is whether you want them to.

With triple-digit annualized interest rates and practically criminal fee structures, personal loans are a potential disaster in your life. Yes, Lending Tree is a reputable company helping you find the loans you need, but always make sure you’re aware of whether those loans are in your best interest in the long run.




Guaranteed Loans for Bad Credit with No Fees

You don’t want to pay fees. Fine. There are online lenders who will accommodate you, but you have to know they’re going to get their money somehow. So if you don’t want fees you should be prepared for other aspects of the loan to be even worse.

Do the math:

If a lender says they’ll give you guaranteed signature loans with bad credit and no fees, how much can they earn on a $1,000 loan?

Loan Amount: $1,000
Fees: $0
Loan Term: 21 days
Interest Rate: ?

Why the question mark next to interest rate? Because even though they may quote you 10% of the total loan, if you factor in the term (21 days), you’re actually going to be paying triple digit annualized interest.

“No I’m not!” you say defiantly. “It’s not like I’m going to hold this loan for a full year.”

I’d hope not, but the statistics are not in your favor. The majority of people who borrow guaranteed personal loans for bad credit do NOT pay them back within the original term. C’mon…think about it. You’re borrowing $1,000 with the expectation of paying it back in three weeks (and sometimes less). That means you’ll need an extra $333 per week just to pay back the principle. But there’s no way you’ll have less than $150 interest due on that loan, so the reality is you need more than an extra $400 per week just to pay back this loan on time. Do you even make $400 per week?

Sure, you might be taking out unsecured signature loans just to cover you till payday, and your next paycheck might pay off the principle, but what if it doesn’t? Or what if you have to repair your car, water heater, or buy a new washing machine with the loan? Then you can’t zero it out with your next paycheck.

People wonder why personal lenders charge such crazy fees and interest rates. I’ll tell you why. It’s because a high percentage of their borrowers don’t repay their loans. So they use high fees and interest to recoup as much cash as possible before your typical payday loan borrower defaults.

So rather than looking for guaranteed loans no credit check, let me encourage you to evaluate what got you into this position in the first place. Examine your income, your personal budget, your spending patterns, and try to put yourself on the path to never needing this kind of horrifying financing again.

Do You Really Need A $25,000 Personal Loan?

According to Lending Tree, a personal loan can be used for anything from debt consolidation, a wedding, a vacation, or other personal uses. There is technically no restriction on what  exactly a personal loan can be used for, but sometimes people opt for a home equity loan, or an auto loan, for certain other expenses.

There are some risks to personal loans, however. While it’s great to think about being able to buy virtually anything with a $25,000 personal loan – from a boat to a vacation to dirtbikes – its important to know that they often carry much higher interest rates than other loans. We calculated a 60-month, $25,000 personal loan in New York at over 10%. As of April 2011, a 30k Home Equity Loan at Bankrate was a little over 7%; auto loans are typically 2-5% depending on your credit and the make/model of the car. The reason for this is that personal loans are not secured by assets like a home, automobile, or other collateral. In order to cover the risk they take by lending money, the bank needs to charge a higher interest rate.

Other Alternatives To A $25,000 Loan

Consider a credit card and home equity line! According to the Federal Reserve, you CAN use a home equity line of credit for expenses such as education, medical bills, and other things. Most people use their home equity line for home remodeling and repairs, too.

Credit cards can be a good way to avoid a high interest rate on a 25000 personal loan, too. Depending on your credit score range, your credit cards may have a lower APR than what you would be approved for on the personal loan. But if you have a low Fico score, you may want to check out your options with Lending Tree bad credit. They’re not just a perfect credit mortgage provider.

Always stop and think before you go applying for a loan of any kind – chances are there are other creative solutions that you can take so that you can avoid a higher interest rate and another monthly payment to make.

I Need A Loan ASAP!

I Need a Loan ASAP, But My Credit Score Is Terrible

Having bad credit doesn’t necessarily mean the money you need is out of reach. Loans for people with less than desirable credit scores are out there because it’s something there is a demand for, but unfortunately the process of getting the money won’t be without consequences. These consequences might be worth facing depending on the nature of your financial emergency, but think it through carefully before taking on a loan you can’t afford to pay back.

What is the easiest type of loan to get with bad credit?

There’s a great chance you can get approved for a payday loan with a bad credit score. Most payday lenders require nothing more than proof of income and a bank account number before loaning money. This might sound like a win-win, but you’ll probably be charged up to $20 in interest for every $100 you borrow. You might also be out of luck if you need more than $2,000 because most payday lending companies specialize in smaller loans. Payday loans might additionally be illegal in your state. For example, payday loans in Georgia are now prohibited thanks to the Payday Lending Act of 2004 which banned lending offices from charging excessive interest on loans below $3,000.

Other Alternatives To Payday Loans

I need 3000 dollars fast, and a payday loan won’t do. What else is there?” You can still borrow $3,000 with a low credit score, but you’ll have to seek out lenders that specialize in bad credit loans. These lenders generally charge high interest rates, and if you borrow $3,000, you might end up paying back $6,000 by the time the loan is up. If you cannot find another way to get your hands on $3,000 apart from using a bad credit lender, you should make an effort to pay extra on the loan every month. Doing this will knock out a lot of the interest, making the loan less expensive for you in the long run. Another advantage of paying extra is that it will definitely boost your credit score if your lender reports to any of the three major credit bureaus. Either way, work toward building up your credit rating to avoid high interest rates the next time you need quick cash.

Getting the Best Rates on Personal loans

Every day numerous people sign up for personal loans. A personal loan is something offered by hundreds of companies and they are often in competition with one another. They employ various ways of getting a person’s attention so if you are thinking of getting a personal loan you have to be a bit choosy about which company you should sign up with – many say they offer bad credit personal loans up to 5000, but how often is it really the case?  It is a must ton be wise when signing up for a personal loan. You would want to get the best rate possible. You want terms which are advantageous to you.

The process of getting a loan is shrouded in mystery. How can one person get personal loan and how does another person’s application for a personal loan get rejected? There are three things which most companies consider when deciding whether to grant a person a loan or not and these are the character of the person, the capacity of a person to pay his or her loan and the credit score of the person.

Who is the person paying for a loan? Has he or she applied for other types of loans in the past? How many times were his or her loan applications, rejected, approved? Has he paid his previous loans? Does he still have any outstanding balance? Does he always make payments on time? These are just some of the questions which need to be answered.

Is the person applying for a loan capable of making payments? Are his finances on the verge of bankruptcy? Most companies who lend money rely a great deal on credit reports when making informed decisions. Once you pass all of these that is when they grant you a personal loan.

On the other hand, before signing up with any company for a loan, you have to do comparison shopping. You have to look closely at the several companies which offer $25000 personal loans. They can be very different from one another and you want to choose a company and an offer which is to your advantage. You can get instant quotes from the internet. It makes your search easy and fast.

You also have to know and understand the interest rates various companies give on loans. You have to look specifically at the APR or the Annual Percentage Rate. Two companies may have the same interest rates but they often will have different APRs. The rule of thumb here is the lower the APR, the better it will be for you. The repayment period also impacts the total cash you will be paying. Shorter payment periods often mean larger or higher payments.  Calculators are very useful when it comes to getting the results.

There are various ways of paying your debts and one of them is though making automatic deductions from your bank account, another is to pay through checks. Ask about your payment options and whether they give discounts when you use one particular method. It is also a must for you to review your credit score with the three different credit bureaus. Make sure that it is accurate. If there are any discrepancies, dispute them right away and put everything in proper order. Make sure that you credit score is correct and as high as it possibly can. Do not forget that your credit score can influence the rates you get on your instant approval unsecured loans.

Poor Credit Credit Cards

At a certain point a person who has damaged his or her credit has to decide when to say enough is enough. Now, I’m not saying that the person should avoid all credit completely, but I do think they should seriously evaluate the ways they’ve used credit in the past and make some observations about what circumstances ruined their credit to begin with. Only after they’ve made the effort to figure out where they’ve gone wrong in the past, as well as a commitment to improving in the future, should they start thinking about rebuilding their credit and using it again. And when they’re ready for that, poor credit credit cards are probably not a bad way to go.

In the spirit of full disclosure the first thing we should say is that credit cards for poor credit are not free…they’re not even cheap. The price of a ticket to this game usually starts off with annual fees (charged by the card provider just to keep the account open), ‘program fees’ (usually between $50 and $80, charged by the card provider. These fees basically mean “you might flake out, and we’re going to get some money to hedge our risk”), and additional card fees (only charged if you and your spouse/significant other are both trying to rebuild your credit and each want to have your own card).

If you’re okay paying all those fees, getting a credit card with poor credit is probably not a bad idea. Not only will it get your foot back in the world of consumer finance, it will also keep you from getting into trouble again.

What do I mean by that? Well, these kinds of cards are almost always secured or prepaid, and as such the issuing bank is keeping you from running up a balance you can’t pay. They’ll require you to make a deposit, which you can’t touch while your card is open, and basically let you borrow up to the amount that you deposited. Seems silly right?

It’s not. You’re going through the motions here to show the credit agencies that you’re ready to behave yourself with credit. Play the game for a couple of years and you’ll clear yourself of the bad name of “credit-challenged.”

Car Loans for Bad Credit

Car loans for bad credit are actually a lot more prevalent than you might think. After all, in the neighborhood of one in every four Americans has had some kind of problem with their credit that would put them in the class of bad credit borrowers. Your ability to buy the car you want may not necessarily be impeded by your sketchy credit past, but you should go into the loan application process  well prepared. A few tips:

1. First, and most importantly, decide beforehand how much you need to spend on your new car. Notice I said decide how much you need to spend, not how much you want to spend. Putting your wants ahead of your needs might have been a big factor in why you’re a bad credit borrower in the first place, is that fair to say?

2. Take advantage of your free annual credit report, and make sure there aren’t any unfair or inaccurate blemishes on it. Again, note that I said your free credit report – provided through the US government – as opposed to one of the free reports that costs you a monthly fee or a one time fee.

You’re already a credit-challenged applicant. You really want to go over your credit report with a fine tooth comb to make sure there’s nothing you could reasonably do to get your credit score just a little higher. Bad credit car loans exist, but you’re always better off going into the application process looking as good as you possibly can.

3. Learn about, and sign up for, your bank’s billpay program. A prospective lender will be encouraged to see that in spite of past bad behavior, you’re now in a position to make your payments on time every month without even having to remember. I personally set as many of my bills up as possible with billpay just to avoid having to keep track of them month to month. It’s extremely convenient.

If you’ll follow through with these three relatively simple steps, you’re going to find it much easier to qualify for the car loan with bad credit you need to get that new car. Now make sure you use this new loan as an opportunity to rebuild your credit and improve your standing with the credit agencies. Nearly every aspect of your financial life will be simplified by an improved credit score.

Low Interest Student Loans

A college education is already expensive, and it’s getting more costly every day. You could easily spend $10,000 per year for a bachellor’s degree at a school in your home state. I don’t know what the exact statistics are, but I’d be shocked if less than 50% of college grads make it out of school with no education related debt. Low interest student loans are a crucial part of most people’s college experience.

Do you know how to qualify for a low interest rate student loan? Would it surprise you to hear that most education loans come with low rates? I guess that requires a little more explanation.

With student loans you’re first discussion is always going to be about ‘subsidized’ versus ‘unsubsidized.’ A subsidized loan involves the government’s stafford loan program. What happens is you borrow the money you need, and the government takes care of the interest that would normall accrue on that loan. The idea is they don’t want you to be burdened with growing interest balancese while you’re in school and your ability to earn is limited by the fact that you’re in class all day and studying at night. With subsidized loans you’re not going to see any interest accrue until six months after you end your status as a full time student.

On the other hand you have unsubsidized student loans. These do start accruing interest from the day they’re disbursed, which makes them a little more costly. Although they interest does start to accumulate, you still won’t be required to make any payments until you’re six months removed from your ful time student status.

You also have private student loans. Once you’ve borrowed the maximum authorized by your school, you might need to apply with private lenders if your education costs still aren’t covered. These are going to be the highest interest loans you’ll get during school.

Now, what you need to understand as you approach the financing of your education is that the ‘low interest’ doesn’t really come into effect until you go through the loan consolidation process after graduation. Once you leave school, and as the time that your payments will begin nears, you’re going to get massive amounts of mail from consolidation companies who want to combine all your loans into one balance with one payment, at one low interest rate. This is the smartest move you can make.

Going through the consolidation process is going to secure a very low rate for you, making your payments as manageable as possible as you begin your professional life.

Consolidate Private Student Loans

The time just before and just after college graduation is chaotic to say the least. You’re making plans for graduation, double-checking your transcripts, polishing your resume, interviewing for jobs (hopefully), and looking forward to starting your life as a full-fledged grownup. But along the way, don’t forget to consolidate your private student loans. It’s one of the most important financial moves you’ll make as you start your professional life.

I remember when I went through this process – without the consolidation my interest rate was going to be something like 6%. After consolidating my private student loans was around 2%. Let’s do the math. If  you graduate with $20,000 in loans, your situation could look like this without consolidating:

$20,000 to be repaid over 10 years with 6% interest creates a monthly payment of around $222. By the time you pay off the loan you’ll end up having paid over $6,600 in interest on your education.

The same loan balance and repayment period with a 2% yields a payment of around $184 and costs you only just over $2,000 in interest over the life of the loan.

Now, if you took the extra $38 per month and saved it at 5% interest during that same ten years, you’d end up with over $5,700 in savings. So you save $4,600 in interest and you get to have an extra $5,700 in a savings account. That’s a swing in your favor of over $10,000. Are you starting to understand why it’s so important to consolidate your private student loans?

Here’s how it will work. Your loan payments aren’t going to be due until six months after you’re no longer a full time student (hopefully that means six months after graduation, right?). During those six months you’re going to get plenty of offers in the mail offering you great deals on student loan consolidation loans. Do not accept the first one. In the age of the internet, take the time to research the companies that are contacting you. Check them out with the Better Business Bureau, and see if you can find any reviews on third party sites written by their current customers. You’re going to be married to these people for a long time, you want to make sure they’re above board and they’ll take care of you.

Also look for a consolidation company who will give you a further interest break if you set up your payments on your bank’s bill payer. Not only will that save you some interest, it will protect you from messing up your interest rate and your credit by making payments late or not at all.

Now, go enjoy adulthood! You’ve worked hard to graduate and get where you are, now keep progressing and enjoy your life.

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. If you have excellent credit you might be able to get $25000 personal loans, but if your credit is terrible you won’t even get a fraction of that amount. 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.