Escaping Bankruptcy’s Effects With Equity!

Bankruptcy has terrible effects on your ability to obtain finance. In order to solve this problem there are many things you can do. However, most of them will just take years to show effects and if you need finance sooner, you won’t have that much time. Your home equity can aid you in getting approved for a loan even after bankruptcy. Learn how it is done!

The equity you’ve built on your home can save you from financial hazards especially if you have gone through a bankruptcy. Some lenders won’t lend to you unless at least 6 years have gone by since your bankruptcy was discharged. But if you apply for a home equity bankruptcy loan you may get approved before that term.

Bankruptcy’s Consequences

Bankruptcy has terrible consequences on your credit report. Bankruptcy will drop your credit score to bottom lows and will ruin your ability to get finance at reasonable rates for many years and will definitely be an obstacle for getting any kind of finance at all. When it comes to loan qualification, as soon as you inform or a lender finds out about your bankruptcy, chances are you’ll get immediately declined.

Lenders consider those who have gone through a bankruptcy process to be high risk. In fact bankruptcy victims are considered the highest risk applicants in the loan market. Qualifying for finance in such situations is extremely complicated. Only by giving the lender some sort of additional security would you ever boost your chances of getting approved.

Home Equity Loans

Home equity loans are secured with the equity you’ve built on your home, thus, the risk involved in this financial transaction is lower than in regular loans. Given that you’ve gone through a bankruptcy and your credit score is probably too low, these loans are great news. Qualifying for home equity loans is not so complicated; the main requirements are a decent recent credit history and an income high enough to afford the monthly payments.

Your recent credit history has to show no stains at all. This implies that the last six months on your credit report have to be impeccable. As regards to your income, the requirement will vary according to how much money you request. Nevertheless, you can reduce the requirement by opting for a longer repayment program.

Getting Prepared So, in order to get prepared for applying for a home equity bankruptcy loan, you need to make sure the last six months on your credit report show nothing but timely payments of your financial obligations. If you have delinquencies on your credit report, you’ll need to wait till your credit history improves. Though you may be anxious, it is better to have patience and wait for a couple of months than applying too soon and getting declined consequently reducing your credit score due to it.

Where to Apply In order to find the right lender for you, you can search the internet for bankruptcy loans and you’ll be able to find many lenders willing to give you free loan quotes so you can compare rates, amounts, and other terms and decide which loan best suits your needs. Just don’t hasten to apply for the first offer you receive, take your time, compare what they have to offer and only then apply.

Unsecured Bad Credit Personal Loans

Unsecured bad credit personal loans are designed to meet the needs of those who have a poor credit score due to a bad credit history. There are different types of bad credit loans, each with its particularities but all tailored for bad credit.

Unsecured bad credit personal loans don’t have such advantageous terms as loans for people with perfect credit. Whether you need a secured or emergency unsecured personal loan of a low or high amount, with a long or short repayment program!

Understanding Secured And Unsecured Personal Loans

When comparing secured and unsecured loans, it is to be noted that lenders tend to be more flexible when granting secured loans. Usually the borrower is given a lower interest rate and longer terms to repay the loan compared to an unsecured loan.

Secured personal loans are provided to borrowers who are able to provide some kind of collateral as security. The most common forms of collateral used to secure loans are personal property such as your home, land or automobile. When your home is used as collateral, you will often hear the loan referred to as a home equity loan or a second mortgage loan. Personal loans can also be secured with stocks, bonds, certificates of deposit, a savings account, and so on.

This property is kept as collateral with the lender. He may repossess it legally, if you are unable to repay his money. In return you enjoy low interest rate and long repayment duration. You are also free to fix monthly installments according to your capacity and wish. Besides this you are also free to borrow a good amount due to the presence of collateral. Under secured personal loans, a borrower can access an amount which ranges from 5,000 to 100,000 pounds. This amount is quite satisfactory to meet any of your personal needs.

It must be mentioned that secured personal loans are not free of faults. If you fail to repay the loaned amount within proper time frame, the lender can repossess your property. But if you are totally determined about you and your repayment ability, you can easily enjoy all its benefits without any kind of inconveniences.

For those who do not have any collateral to put up for security, they can apply for an unsecured loan because it does not require any collateral. That is why unsecured loans are a great option for non-homeowners. Unsecured personal loans can be obtained without pledging your valuable asset. You can easily borrow anything within a range of GBP1000 to GBP25000. The repayment term varies from one to 10 years. You can borrow an amount that can be easily repaid on time.

You can access non secured personal loans easily as they dont involve collateral evaluation formality. There is less of paperwork involved and this makes the process fast and convenient. Where as with a secured loan, it takes more time for the loan process because the lenders need to evaluate your collateral and there are more paper works.

The loan amount offered depends on your annual income, financial standing and repaying ability. After analyzing these factors an amount is decided and sanctioned. You can choose a repayment plan depending on your repaying ability and the one that is feasible. However, a minus point is these loans are offered at slightly higher rate of interest as they are free from collateral clause. But it is beneficial in another way in that you are not putting your home or valuable under risk to the lender. If you have higher a credit score it can guarantee a higher loan amount and a lower interest rate.

These loans can be applied from various banks and online as well. Online is the most convenient way of applying as you just have to fill up a simple application form. You can search for competitive rate deal with flexible conditions by doing a bit of market research. Author: ksanjitha