Bad Credit Signature Loan
A bad credit signature loan is an unsecured loan that does not require the borrower to have good credit history. Many consumers today have found themselves in tight financial situations because of rising fuel and food costs or because of high interest charge card debt. The reason for bad credit is not an issue with a bad credit signature loan. However, this type of loan may have higher than usual interest rates associated with it. A lender may see a borrower with bad financial history as a high lending risk. Lenders may be able to provide some options on repayment terms and interest rates for those borrowers who are considered high risk.
Consumers who have questionable financial history might want to consider a bad credit signature loan in order to pay down and pay off debts. High interest revolving charge accounts associated with charge cards are hard to get paid down by just making the minimum monthly payment. In order to see any substantial difference in the pay off balance a consumer needs to be able to send in much more than the minimum due. Too many high interest accounts can lead to a person having to file bankruptcy especially if unforeseen circumstances make it impossible to stay caught up. Once a person gets behind on charge card payments it is almost impossible to ever get caught back up because lenders tack on late fees, over the credit line fees, and higher interest rates.
Unsecured loans do not require any security or collateral and borrowers do not have to worry about having high financial scores to obtain an approval. Collateral is required for types of loans where lenders want something of value in case the borrower defaults. Collateral could include property, land, or assets of value such as jewelry or an automobile. A bad credit signature loan does not require borrowers to own a home. However, an applicant will need to provide the lender with a current address, employment information, checking and savings account information, and monthly salary amount. An applicant will need to provide a social security number, date of birth, a contact number, and an email address.
Qualifying with some lenders may require that a person has a secure past employment history and be with the current employer for at least two years. The borrower must have a current employer before he or she can be approved for a bad credit signature loan. Borrowers who are currently involved in bankruptcy may be turned down for funding. However, having a bankruptcy on financial history that goes back a couple of years should not keep one from getting funding. People who are self-employed must be able to prove that they have a secure income amount each month or they may be turned down for funding. Today creditors can not do the same things that they could do during Bible times when a person defaults on a loan. "Now there cried a certain woman of the wives of the sons of the prophets unto Elisha, saying, Thy servant my husband is dead; and thou knowest that thy servant did fear the LORD: and the creditor is come to take unto him my two sons to be bondmen" (2 Kings 4:1). They can pursue the borrower to pay the loan and can put the account information on one's credit report making it hard for the borrower to obtain financing anywhere else.
Lenders offer other types of loans for people with bad financial history such as home, automobile, cash advance, debt consolidation, business, and student. The requirements for a bad credit signature loan are similar for other types of funding. The main difference between conventional financing and bad credit financing is that there are higher interest rates for those who have bad financial history. To avoid paying higher interest rates a borrower will need to do some financial repair before applying for financing. Some lenders have information available on doing financial repair that can be very useful and instrumental in raising financial scores.
Credit repair should be started by obtaining a copy of one's financial reports from all three major bureaus. A consumer should look over each report very carefully and highlight any errors found. A dispute form should be filled out for each incorrect item highlighted. Any paperwork that could prove the accuracy of disputes should be included when sent to the major bureau. After receiving the disputed information the bureau will send the information to the creditor in question. If the creditor can prove the accuracy of the report then the item will remain on financial history but if the creditor does not answer back then the item will probably be removed from the report. A borrower should give this process some time before applying for funding on a bad credit signature loan.
One of the reasons that lenders are now offering funding for people with questionable financial history is because there are so many people who have had financial difficulty. Everyone's story is different. Some people are having difficulty because they are overextended and all of their money is going to pay bills and they have nothing left for emergencies. Now that gas prices are so high their situation is much worse. Others may have high medical bills because of an illness that has made it impossible to go to work everyday. Others have lost a good job and can not find another one that pays very well. A bad credit signature loan is a good option for those who just need a little help to get over a financial crisis or for those who just need a second chance.