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Loan options if you have a bad credit rating

May 13th, 2008 08:09
i can do it, Mark Gomelli, http://www.breadmarket.co.uk/debt-consolidation/bad-credit-secured-loan.php


When lending money, thereís always the risk that you might not get 
your money back. As such, you always put into consideration; how much 
you can trust the recipient, your past monitory experiences with this 
person, etc. you might also take other steps such as holding onto 
their items e.g. jewellery as security for the loan. 
When it comes to financial institution, they donít know you in person 
and probably have no financial experience with you. Therefore, another 
method of weighing up the level of risk you pose as a borrower is 
needed. This comes in the form of a credit rating; credit ratings are 
used in nearly all forms of borrowing, be it loans, credit cards or 
mortgages. 
If you happen to have a bad credit rating, the odds are against you; a 
bad credit rating tells the lender that youíre an untrustworthy 
customer.  
Some lenders will avoid you all together, whereas others might be 
willing to take more risk, but to make up for these risks, the loan 
costs more by way of carrying a high interest rate. 
To put yourself in a better position consider the following options:
1. A Loan with collateral
Secured loans have a lower interest rate and are easier to get because 
the lender has the security of your assets in case you fail to pay 
back the loan. The most common form of security is the house. If you 
donít have a house however, worry not; some lenders will also consider 
other belongings for collateral e.g. jewellery, car, or other 
possessions.
2. Unsecured loan
These are much riskier loans and have a potential to get you deeper 
into debt due to the very high interest rates. You should only opt for 
these sorts of loans if the amount you need is small and you have a 
clear-quick plan of repayment.
3. Family or friend Loan
Perhaps the best option if youíre able to get it, why? In most cases 
family or friends will not ask for interest on the loan, they might 
not even set a time limit for repayment. The most important issue here 
is responsibility:
Itís estimated that one of the biggest cause of family fall outs is 
money, itís even easier to fall out with friends over money. If you do 
take a loan from a friend or family member, be sure to pay it back 
within the promised time frame and if possible, throw in some interest 
for good measure! 
-----------------
Bad credit loans may also be reffered to as adverse credit loans, for 
more on adverse UK loans see:
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