Showing posts with label credit card. Show all posts
Showing posts with label credit card. Show all posts

Monday, December 14, 2015

The Truth About Bad Credit Debt Consolidation!

Bad credit restricts approval for most kind of loans and even if approval is possible, the loan terms are altered to match the risk implied in the financial transaction for the lender. In order for a loan to be suitable for debt consolidation, there are however, certain terms that need to meet some requirements and bad credit may impede this.

Secured And Unsecured Consolidation Loans

Secured consolidation loans are home equity loans or second mortgages that use your home equity to guarantee the loan amount. The interest rate charged for this kind of loans is low and thus, they are perfect for consolidating debt. Since the loan is guaranteed, there are not harsh credit requirements and someone with bad credit can easily get approved.

Unsecured consolidation loans have no collateral at all and thus, the risk involved in the financial transaction is higher and so is the interest rate charged for them. The lack of collateral also implies that the lender will have more strict requirements for approval and though someone with bad credit may get approved, he will be required to pay higher interest rates.

Thus, bad credit applicants should be divided in two: those who are homeowners and thus, despite their bad credit can obtain a reasonable interest rate and those who are non-homeowners and need to resort to unsecured consolidation loans. The latter, even if they qualify and get approved for an unsecured consolidation loan, chances are that they'll have to face higher interest rates and thus, consolidating with a higher rate makes the transaction too onerous to be useful.

Consolidation Loan Amount

The loan amount is also an important issue, depending on the amount of outstanding debt you have, you'll need to apply for a high amount consolidation loan or a small or medium amount consolidation loan. High loan amounts can only be obtained through secured consolidation loans and thus, only those with bad credit who are homeowners can consolidate high amounts of debt.

Those who are non-homeowners can only obtain small to medium loan amounts by requesting an unsecured consolidation loan. Else, non-homeowners should hire the services of a debt consolidation agency that can negotiate with creditors new loan terms since qualifying for an unsecured consolidation loan with bad credit is difficult and you can't obtain high loan amounts.

As you can see, obtaining a bad credit consolidation loan is almost impossible for tenants and non-homeowners. It is better for them to hire a debt consolidation agency and have their debts re-negotiated. However, those bad credit applicants who can offer an asset as collateral can get secured consolidation loans for fair amounts in order to exchange their expensive debt for a single and cheaper loan.

Tuesday, April 1, 2014

Lending

The lending industry has become a prevalent part of the economy of the United States. Today, the foundation of our society is based on credit worthiness and the opportunities available as a result. Large corporations and even the government itself is reliant on various commercial lending and investment programs. On a personal basis, the average American can enjoy his or her high standard of living because of such lending opportunities as mortgages, car financing, and student loans.

Lending today has become a dynamic field that entails all kinds of businesses. Almost every new business get some kind of commercial lending or funding program to start up their new vision. Owning a home is almost impossible today without the assistance of a mortgage. And even day to day purposes today depend on lending extended by credit card companies.

With such a high demand for various lending products, it is no wonder that the lending industry as a business itself has grown my leaps and bounds. It has been forced to adapt to the vast spectrum of needs demanded by its consumers. With its customers ranging from commercial giants to those with great credit to those with bankruptcies and other credit problems, everyone poses a genuine need for various lending products.

The lending industry is no longer confined to just banks and credit unions. People interested in personal and commercial lending today find they have an array of options. Today furniture companies, clothing stores and even gas stations all have their own brand and format when it comes to lending products. The internet has added a vast base of financial companies that offer new and flexible lending products to its target market as well.