subject: Is It Smart To Get Fat Loans With Bad Credit? [print this page] Is It Smart To Get Fat Loans With Bad Credit?
Is it wise to get big loans with bad credit? The answer is: maybe. It depends on whether you're 99.99% confident you can pay them back quickly before too much interest accrues.
The fact that you have bad credit indicates that for whatever reason you're more likely to be bad with money. You got into trouble before, maybe for a small HP agreement and now you either can't get a loan or the rates are ridiculous.
If you just made a stupid mistake, that's good. Say you bought a TV on the never-never and thought you would sit out a few payments without comeback. Then you applied for a personal loan and got a surprise. Your credit rating is now poor and this means you get offered silly deals or none at all.
Some lenders target folks with poor credit. They're like bookmakers hooking gambling addicts. They know they've got a captive market.
So what can you do to fix this situation?
First, try your own simple credit repair.
Start by paying off high interest loans, like credit card debt. Then cancel all your credit cards _except the oldest one_, for the credit history attached to it. Credit referencing agencies look at all the potential credit lines you have available to you when deciding how much of a risk you are.
Buy some small things on the old card, then repay the debt religiously. Pay all your bills before the due date. You don't want companies flagging you up for missed payments.
Next, do not make too many enquiries to different lenders within a one month period. This is for personal loans. Mortgages or car loans are OK. It looks like you are desperate and that's a bad sign. All these guys know about you is what they've got on file. You should send up green flags, not red ones.
Visit a few loan comparison sites. Don't make any applications. Just see who's offering what. You'll see the same names popping up over and over again. These are bad credit loan specialists. They offer deals like: borrow 500 and pay back 550 within the month. Sounds good? It can be, if you can pay it all off within the month. What it means, however, in that example, is that you're being charged 120% interest P.A.
Small loans are OK if you can pay them off quickly within one month. They can quickly become a nightmare if you can't.
