When in need of a loan, having a bad credit can rule most of your options out. On discovering how poor their credit scores are, a lot of people view their situation as unsalvageable. This post will thus show you how wrong this assumption is and provide a solution to how you can cope with a bad credit by getting secured loans from direct lenders like sites.google.com/site/speedycashreviews .
Knowledge of your credit and what affects it is very important. This is because it will prevent you from making mistakes that would take several years to rectify. Bad credit isn’t always as a result of negligence or misuse of your account. There are other factors that will make your credit score poor and they include :
- Collecting accounts
- Defaulting on payments
- Late payment
- Filing bankruptcy
- A charge off
Those are just a few factors that might make your credit score plunge down. Another cause for poor credit would an account with short history where first-timers are opening their first accounts.
Secured loans for people with bad credit
As the name suggests secured loan is money that can be borrowed by property owners and these loans are secured against their property. Application for this type of loan is quite easy as long as the individual borrowing money introduces collateral. This ensures that lenders can sell the property if the borrower were to default. The five most common assets people use include:
- Mortgage and second mortgages
- Secured car loans
- Investments such as stock can be used as collateral
- Savings secured loan
While people with high credit scores will enjoy low-interest rates, those with bad credit will, however, be charged high-interest rates. This is because lenders are well aware that individuals with poor credit would not qualify for conventional loans.
Benefits of secured loans
- Borrowers are free to borrow large amounts of money depending on the property they offered as collateral.
- The repayment period is long, where a loan could last anywhere between 5 years and 20 years
- By acquiring this type of loan, people with bad credit can boost their scores by ensuring early monthly payments of this loan
- There is less restriction on your intended purpose of acquiring the loan
Where to borrow secured loans
One of the more popular ways to get lenders is the use of the internet. You will have to check online for the available lenders and you can compare their rates to find the cheapest one.
Friends and family are also a good source of information as they can offer insight about their experiences acquiring secured loans or at least point you in the right direction.
While these loans can be acquired easily even with bad credit, they carry a considerable risk. If you do not need money urgently or you are planning to borrow in a few months, a better plan would be to research and understand how to improve your credit.
This will be more advantageous as you will qualify for different loan types and the interest rates you get charged would be lower than your current situation.
However, if your current situation demands the money immediately and there is no other alternative, the least you could do is to attempt to make timely payments which would boost your credit score.