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How To Obtain Your Bad Credit Loan Easily Today
If you have bad credit, you are probably all too familiar with rejection, possibly being turned down many times for credit that you need. It may seem as if heartless bankers do not care about your needs, just because a few past mistakes have made you appear to be a credit risk. If so, you might want to consider the friendlier lending environment online with lending institutions that specialize in bad credit loans.
Bad credit loans are for those with credit scores that are less than 650. Once your credit score has declined to this level, you can typically expect to pay more interest on any loan that you are lucky enough to qualify for. However, the online lending environment is more competitive with many lenders who are willing to give you the needed second chance to get you back on your feet while rebuilding your reputation as a creditworthy borrower.
Loans For Cars, Repairs And More
Whether you are looking for a bad credit personal loan, bad credit automobile loan, bad credit student loan, online lenders are standing ready to process your application without the hassle of the traditional lending institution in your hometown. Get money for a vehicle, appliances, home improvement, travel, education, etc., from the comfort of your own home without setting foot into a bank.
To apply, you will need to visit the lender’s online secure website, where you will find an application link. You will be asked to verify your identity, income, residence. Most of the material that you will use to document your circumstances can be easily emailed as well as transmitted via facsimile to the lender for quick processing. In addition, you may be asked to prove several personal references on your application.
Amounts Up To $10,000
When you apply, you can ask for any amount that you deem necessary for your needs. Most bad credit loans start out as low as $5,000 or may be for as much as $10,000 – more under certain circumstances.
You can make your application for your bad credit loan look even more appealing by applying with a creditworthy cosigner. Your cosigner should have good, established credit as well as be willing to pay the loan in the event that you fail to do so. Your cosigner can be a relative, friend, co-worker.
Another strategy to enhance your approval is to pledge a security against the loan. This security is known as collateral. Collateral can be your home, vehicle, boat, real estate – any item of true value that you can prove legal ownership of by presenting a title of ownership for. It is important for you to keep in mind that any item you allow the bank to use as security for your loan stands the chance of being taken should you fail to make your payments.
Easy Receipt Of Funds
You can receive your bad credit loan in two convenient ways. You might choose to receive your bad credit loan electronically via an electronic funds transfer to your bank account. You can also elect to receive a paper check that will be mailed to your home address. The fastest way, of course, is to receive the electronic deposit, for which there may be a small fee.
Common Loans Used To Buy Real Estate
For most home buyers, especially first time home buyers, shopping for a home can be stressful and confusing. Many times the most confusing part of the home buying process is understanding the different types of loan options that are available. Here is an overview of the most common loans buyers use to purchase real estate.
Conventional Loans
Conventional loans are loans that use Fannie Mae and Freddie Mac guidelines in order to make the loans conform with respect to Loan to Value (LTV), borrower credit scores, borrower income requirements and minimum down payment amount. Conventional loans allow a minimum down payment of 5% and are generally utilized by home buyers with excellent credit. Mortgage origination fees with conventional loans are less than government insured loans like FHA and VA loans. Conventional loans allow the home buyer to receive a sellers assist ranging from 3% -6% of the purchase price depending on down payment amount.
FHA Loans
FHA Loans are loans backed by The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD). FHA does not lend money but rather insures the loan against default by the borrower. Since the disappearance of the no money down loans FHA loans have become increasingly popular because their 3.5% down payment requirement is the lowest of all loans currently available to most home buyers. FHA loans are generally utilized by home buyers who cannot qualify for conventional mortgages because FHA loans offer more flexibility with respect to down payment amount, credit score, debt to income (DTI) ratio and other important loan qualification variables. FHA loans charge an upfront mortgage insurance premium (MIP) which makes FHA loans origination fees significantly greater than conventional loans.
VA loans
VA Loans are available to borrowers who are serving or served in a branch of the US Military. VA home loans are overseen by the U.S. Department of Veterans Affairs and allow the home buyer the opportunity to purchase a home with no money down (100% financing!) provided 1) the home appraises and 2) the seller pays all closing costs. There is no PMI on VA loans but the VA charges an upfront VA funding fee which can be rolled into the closing costs. Veterans seeking to purchase a home with a VA loan must still prove sufficient income, credit and cash reserves.
ARM
An adjustable rate mortgage or ARM, also called variable rate mortgages, is a loan where the interest rate is not fixed but instead varies periodically. Interest rates on ARMs are usually linked to an index, like the LIBOR, and rates vary to reflect to the cost to the lender of borrowing money in the current credit market.
Home Equity Loan
A home equity loan is a loan where the borrower uses the equity in their home as collateral for repayment of the loan. Home equity loans are often used to finance major expenses like home renovations, unforeseen medical bills or childrens college education. A home equity loan creates a lien against the borrower’s house, and reduces the homeowners equity in the home.
Home Equity Line Of Credit (HELOC)
A home equity line of credit, also called a HELOC, is a loan for a set amount that is secured by the borrowers existing equity in the home. HELOCs differ from home equity loans in that the borrower does not necessarily receive the entire loan amount up front but instead uses a line of credit to borrow amounts that do not exceed the set credit limit. Money can be borrowed using HELOCs during the draw period which can be anywhere from 5 to 25 years and the monthly repayment minimum is usually a small, interest only payment. The full principal amount of the loan, sometimes called a balloon payment, is due at the end of the draw period.