Bad credit history can stick to you at any point in your life
. Poor credit history may simple mean that you have some bills that are outstanding. People who have faced bankruptcy in their life are also considered to be bad creditors. These people find it difficult to get a loan in times of urgent need of cash due to their low financial status. As a result, some institutions offer bad credit loans which help these people to consolidate their debts.
Tenants and homeowners can also obtain instant fund approvals without pledging collateral. You have to prove your repayment sufficiency before the lender. The loan amount can be used to meet various emergencies like pay off pending bills, grocery bills, funding education and shopping expenses.
Bad credits loans are availed in the secured and unsecured form:
If the borrower opts for secured advances, he has to place some security against the credit lent. The interest rate charged to him is nominal. People who opt for the unsecured mode of monetary aid do not need to pledge any asset as security. These advances are lent on good faith. The interest rates charged are high as the lender is at a risk.
The lender does not check the credit standing of the applicant. So any person irrespective of his history is encouraged to apply. But the lender has to be convinced that the borrower is in a position to repay the monetary aid granted to him.
The credit applicant is sanctioned credit ranging from 5,000 to 5, 00,000, for a period of 5 to 25 years. Before lending such advances, the lender takes in to consideration the borrowers employment condition and his repayment ability.