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Thursday, October 4, 2012

Advantages and disadvantages of loans for people with bad credit

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You are in a desperate need of immediate cash, which has made you run from pillar to post to get a loan. However, your credit history depicts you as a poor payer or a defaulter and being short of money you find yourself in the doldrums as you can see no escape from the emergency that you are in. 

If you have bad credit and need  loan you are not alone and there are many like you who find themselves in such a crisis. Thus, in view of such borrowers, many lenders in the financial marketplace have resorted to providing loans for people with bad credit. However, before you take the plunge to apply for a bad credit loan, take a look at the advantages and disadvantages of the same.

Advantages of bad credit loans


No issues with bad credit history- The best part of bad credit loans is that you need not worry about your past credit record since the lenders do not bother about such things. Instead, they look at the capacity of the applicants to repay the loan in future, unlike conventional methods of lending where the past financial record forms one of the main factors on the basis of which a loan may be out rightly rejected.

Fast approval- While personal loans applied in the conventional methods are hard to get approved; approval rates for bad credit loans are much higher ranging from 80 to 90 per cent.

Building credit score- Even if you have had issues with your credit score before on grounds of being a defaulter in repaying the dues, obtaining a bad credit loan gives you the opportunity to re-build the same. By timely and regular repayment of the loan amount, you can improve your credit score, thereby building a strong financial standing.

Large amounts- Bad credit loans also have the advantage of lending you higher amounts in a short span of time, although higher the amount, higher will be the interest that you have to pay.

Disadvantages of bad credit loans


High interest rates- Lenders giving out loans to those having a bad credit history, in lieu of the high rate of approval and fast unsecured personal loan, charge rates of interests which are much higher than the normal ones. This is a sort of security, with which the lenders arm themselves in exchange for giving out bad credit loans.

Unsecure provider- Since the system does not come with a guarantee, often people applying for bad credit loans fall into the trap of going for the wrong lender.

Finally, if you apply for loans for people with bad credit, you need to be sure of being able to repay it timely to avoid being entangled into a vicious cycle of debt.

18 comments:

  1. The loan credit lenders are marketplace for the financial loan. The resorted credit plunge are so credit financial loans. The systems are so applying trap lenders of the credit loan.

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    1. Awesome post. Thanks for more to post about loan.

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    2. Thanks for this post about loans advantages.

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  2. if having bad credit loans raises the interest rates, just compare it with the bank offers, its still the best way.

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  3. I could believe on this one rather than other people claiming that it is a disadvantage, in general. No, it's not. Its' a bad idea of the person who made the loan is irresponsible.

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  4. Hello Everybody,

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  5. lling (and handling of that mass culling) of staff today, it seems to have been a "good" daywww.needrapidcash.com

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  6. Just like what they say, “everything comes with a price.” But that doesn't mean you cannot take these risks—especially if your credit score isn't really something to be proud of. Nevertheless, you'd have to pay it back as soon as possible to avoid financial mishaps in the future.

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  7. A bad credit history can indeed affect future loan applications. Thanks for providing the advantages and disadvantages of bad credit loan.

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  8. Its not easy to get instant loan with bad credit and some few points are good.

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  9. That's true. Its not easy to get an instant loan due to bad credit. This is when private lenders come into picture. First get in contact with a good broker who will do all the hard work for you. Its his job now to find some good private lenders who can give loan at great rates

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  10. In this sense, if you own a home, a piece of land or even a late model car or truck, getting a loan can be much easier indeed. bad credit loans

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  11. H Good post. This is a very nice blog I wonder why the other of this sector do not notice this. Am sure this post has helped me save many hours of browsing other similar posts just to find what I was looking for. Thanks! look at here now

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  12. Best is to go for car title loans. Unlike other types of financing, car title loans don't have a complicated or lengthy approval process. Since you are offering a form of collateral, car loans are relatively easy to qualify for, even if you don't have the best credit score. In fact, many lenders will provide car title loans without even checking your credit score or report. Here Car Title Loans In Toronto are so common. As long as you can show that you have a reliable source of income and a car worth more than the loan you are requesting, the lender will typically approve your loan application.

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  13. It will be very interesting for the people who will attend. It is also useful especially about social media, people can get information because of this. Thanks for sharing. http://www.loanswithbadcreditonline.com/

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  14. Loans are good if they are managed wisely, otherwise you will go bankrupt. My cousin got student loan with very low interest rate and found multiple private student loan lenders on https://www.justmoneysaver.com/loans/student-loan/ all you have to check the interest and repayment options.

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  15. I agree with David. You should talk to a good mortgage broker before applying for a mortgage with a bad credit. And yes, the bad part of getting a mortgage on a bad credit is the very high interest rate.

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