Obtaining Secured Loans – Options for Less Than Perfect Credit
When you have less than perfect credit, getting a loan can be a daunting task. There are a number of lenders who will not give loans to individuals who have less than perfect credit. There are a number of factors that comprise qualifying to get a loan credit score, employment history, even the history of utility bill and rent payments can be taken into consideration.
Secured loans may be the answer to the problem of being rejected time and time again for the loan you need. A secured loan is one that collateral is used in order to provide the lending company with something should payment not be made. For example, a car title loan is one that uses the borrower’s car as collateral. If they cannot pay the loan, the car is signed over to the lending company in exchange of the debt. This can also affect the amount that can be taken out for a loan since the loan usually do not exceed the value of the item being used for collateral.
Secured loans are the easiest way to get a loan if you have less than perfect credit. There is a variety of options depending on the amount needed and what you have in the form of collateral. Secured loans are not just for bad credit, though they are most often used for it. They are also used for individuals who may present a high lending risk. This includes individuals with a high income to debt ratio.
In order to quality for a secured loan, there are a few criteria that need to be met. There is usually a required earnings amount per month for a secured loan. This is to ensure that there are adequate funds to pay the loan. A bank account is another criterion and usually this account must be open and active for a minimum of six months in order to qualify. It is also a good idea to make sure that the account does not have any overdraft fees during the last six months of activity.
Most lenders will offer secured loans to individuals who are looking and who meet the criteria. There has been a crack down recently on the issuing of even secured loans to individuals who have poor credit. Therefore, it is a good idea if you have poor credit and are looking into a secured loan that you find out exactly what the criteria is for each of the lending institutions you are considering. Then see if you meet them if you do, you will have your pick. If not, you will have the opportunity to know what they are and be able to correct any discrepancies between the criteria and your current situation.
When looking into secured loans be upfront, explain the situation you are in and what you need. This can help the lender you are working with help you by providing you with a product that best fits what you can afford and what you need.
