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How to Get a 10K Loan with Bad Credit (Page 1 of 2)
$10000 Loan With Bad Credit- It Can Be Done!
During the financial crisis that the nation has been experiencing for several years now, more and more people have been finding themselves unable to pay their bills. Mortgage payments, car payments and, for business owners, payroll have all become increasingly harder to pay. As a result, many people have been turning to short-term loans, revolving lines of credit, and loan consolidation to assist them financially. For those with bad credit, however, securing a loan may seem impossible. Fortunately, though, even someone with bad credit can receive a $10,000 loan by following a few easy rules and becoming familiar with all possible options in order to decide what the best move will be.
What to Do when Faced with the Need for a Large Loan
Nowadays, it comes to no surprise that many people, especially business owners, are in need of loans in large amounts of $10,000 or even higher. Though this is understandable, if you are one of these many people, it’s important for you to step back and carefully think about why exactly you need a loan in this amount and how you plan on paying it back. If you are spending significantly more per year than you are making, or if you are currently unemployed, it is probably a good idea to not borrow any more money to avoid sinking deeper into debt. Ideally, the only type of person who should be taking out a very large loan is someone in transition. If you were recently offered employment but will not begin your new job for a few months, a large loan may be necessary to keep up with your expenses until you start working. Otherwise, those considering taking out a loan of $10,000 or more should probably focus on managing their debt rather than creating more.
With that in mind, even once you’ve decided that securing a large loan is in your best interest, it is highly recommended that you eliminate some of your more substantial expenses and payments. For instance, it may be smart to post your auto lease online so someone else can take it over. A lavish lifestyle and the accumulation of debt do not go hand-in-hand, so make sure to get rid of excess. Once you’ve settled on securing the loan and you feel confident that you’ll be able to pay it back, the following are potential options open to you:
Signature Loans
Signature loans are exactly what they sound like: loans secured by a signature. Designed for those with excellent credit, securing a signature loan will typically require a steady job and relatively high credit score. Also, they tend to carry high interest rates of 11% or more. For those with bad credit, a signature loan is probably not your best bet.
Auto Loans
If you have a car that has been paid off, an auto loan may be your best option if you don’t have exceptional credit. As long as your car currently books for over $10,000, using your car as collateral for the $10,000 loan is very possible.
Home Equity/Mortgage Loans
Are Payday Loans Good or Bad?
When it comes to Payday Loans there is divided opinion on whether they are a good thing or a bad thing. But why are they perceived by some as a bad way of worrying? To look at this we first need to look at exactly what are Payday Loans?
The clue is in the name. They are a short-term loan designed to paid back on the borrowers next Payday. Therefore, the loan is designed only to be borrowed over a few days or at a maximum of a few weeks.
The key with any borrowing that is taken out is that the borrower is always keen to know the APR. This is understandable and this is why Payday Loans are sometimes criticised. The APR on a Payday Loan is high very high. However, the key with a Payday Loan is remembering that you borrow the loan only over a matter of days. APR stands for Annual Percentage Rate so is therefore a percentage rate over a year. It is therefore deemed a little unfair to judge a payday loan over a year as nobody would borrow the loan over that length of time.
It is common knowledge that if you were to borrow an unsecured loan over a few years you can expect to pay back sometimes double of what you initially borrow especially if the length of time the loan is taken over is a few years. So how does this compare into the Payday Loan world?
It is hard to give a specific figure on the amount of interest you will pay on a payday loan as there are many lenders that have different rates. It would not be unfair to say that you may pay back £30 of interest for every £100 borrowed. So, a £300 loan would cost you a total of £390. This would be at an APR of 2000%+ Sounds high? Well, remember the APR is if the loan was borrowed over a year but you will only borrow it for a few days/ weeks.
On the above Payday Loan model you are paying about 1/3 of the amount borrowed in interest. How would this compare to a £5,000 unsecured loan borrowed over 7 years? A 1/3 more of the amount borrowed would be a total payback of about £6,650. This could be achieved at a monthly payment of around £98. So the APR would be similar as the Payday Loan? No. The APR on this example would be about 12.4%.
I hope the above example highlights the “APR argument” when it comes to Payday Loans. You can pay the same split of interest on a Payday Loan as an Unsecured Loan and the APR is massively different the sole reason for this is that a Payday Loan will only be paid back over a matter of days.
Do Payday Loans deserve their bad reputation? Probably not. If they are used correctly, as a short-term financial product instead of a long-term financial solution, and they are paid back on time then they are an excellent form of short-term borrowing in an emergency.