Bad credit signature loans have been requested by more and more folks than anytime in the financial history of the nation according to statistics from financial institutions who keep track of such things. Aside from that, a few other things should be understood about bad credit signature loans. The money borrowed can be used for anything the borrower desires. These bad credit signature loans are usually granted in smaller amounts than more traditional loans.
What about interest rates?
Unfortunately, it is a fact of life. The poorer your credit rating, the more you are going to have to pay in interest rates. Credit ratings are provided by the three major credit rating agencies: Experian, Equifax, and TransUnion. Their scores are based on your past ability to make payments on time according to contracts you have signed. If you are going to be shopping for a bad credit signature loan, it would behoove you take advantage of your free annual credit reports from these agencies. That way you would know how lenders see you financially when you apply for a loan. This would also give you the opportunity to review your scores and see if there are any mistakes which may have played a part in any past rejections you may have received.
How are signature loans different from traditional loans?
Most traditional loans are backed, or secured, by valuable property. This can be in the form of real estate, stocks and bonds, even a late model car. Should the lender default on the loan, these items can be seized and sold to cover the cost of the loan. Sometimes, the very property being financed is the collateral for the loan. For instance, a house is the collateral on a mortgage, a car is the collateral on a car loan. With signature loans, no collateral is required. The lender only has your promise, or signature, to repay.
How much can I borrow on a signature loan?
Amounts loaned can vary widely based on your credit scores, your needs, your salary, the lender, etc. Signature loans usually range from $500 to $1500. Some borrowers with excellent credit histories can qualify for up to $25,000. As mentioned earlier, the monies from these loans can be used for whatever the borrower chooses. One popular use is bill consolidation. Life becomes so much easier when a number of creditors are satisfied and the borrower only has to make one payment, at one time of the month, to one creditor, at one interest rate. Also, the repayment terms and the interest rates can become a lot more comfortable. Other smaller signature loans, sometimes called cash advance or payday loans, usually range in size from $2-500. These are loans used to straighten out the curves on a financial roller coaster.
Where can I find a bad credit signature loan lender?
The best place to shop for a bad credit signature loan is online. Many folks have bad credit nowadays but they still need a cash infusion from time to time. Private lenders have stepped up to fill this need and competition can be fierce. Diligent shopping should produce a lender who offers good rates with comfortable pay back terms. Just be careful to avoid fraud, read the fine print, and pay back the loan on time as spelled out in your contract. Paying back such loans as stipulated will improve your credit rating and make your next loan approval a lot more to come by.