subject: Bad Credit Loans -the Ideal Loan For Your Not So Ideal Credit Situation [print this page] Credit runs into our lives and has effect on almost every decision we make. On the other hand bad credit runs in our credit application and has effects on every loan we borrow. One fifth of the adult population cannot qualify for regular loans. For such a huge loan borrowing population there are specific loans called bad credit loans.
The borrower should first check his/her credit report and credit score which will provide an idea about their bad credit. Fico score ranges from 300-900. Anything below 620 will mean that the borrower can avail of a bad credit loans.
They can be secured or unsecured. For larger amounts secured bad credit loans are appropriate and would require collateral like home, real estate or car etc. The loan amount granted ranges from 200 pounds to 25000 pounds and repayment period ranges from 1-10 years. With these types of loans the borrower can borrow upto an amount equivalent to 125% of the value of collateral. Lenders are most comfortable in paying the loan equivalent to 90-100% of property value unless there is urgent need of more cash. Unsecured bad credit loans will require no collateral and can be beneficial if the borrower wants to borrow a small amount.
Bad credit loans differ only with respect to interest rates. If you have bad credit then interest rates will be high. It is true that bad credit score is important while deciding on interest rates but they are not the only deciding factors. Collateral, equity, income, current debts, recent credit history - these should be your strong points.
Lenders are usually referred to as "high risk lenders". Terms will differ with different lenders.
The documents required for these loans will include income tax returns, bank statements, estimate of property and title of the property (in case loan is secured), documents to see that there are no legal disputes relating to collateral.
