Do you have damaged credit because of some past credit mistake? Do you feel like applying for a loan with such a low credit score is fruitless? Do you need to purchase items in the immediate future, such as home furnishings or appliances, or desire to make home improvements or remodeling? Perhaps you should apply for a fresh start loan with an online loan company.
Fresh start loans are immensely popular among those with bad or poor credit scores. The fresh start loan gives you the chance to rebuild your credit rating to look more favorable to future potential creditors while giving you the money you need to live life right now.
Secured or Unsecured?
Fresh start loans can be either secured or unsecured. There is a big difference in the two types. To apply for a secured fresh start loan, you will need to own something of value that you have proof of ownership on – such as an automobile, boat, your home, or other piece of real estate. The servicer of your secured fresh start loan will put a lien against the item until you have met all the terms of your loan in full. The unsecured fresh start loan is a loan that is not secured by any property that you own. A secured fresh start loan will cost less in terms of interest than an unsecured fresh start loan because the bank is taking less of a risk when it places a lien on your property that it can exercise if you default on your payments.
Because the unsecured fresh start loan typically carries higher interest than the secured fresh start loan, you might want to consider applying with a cosigner. A cosigner agrees to step up and make payments should you fail to do so; the cosigner can be a friend, relative, or anyone else who knows your financial situation and agrees to apply with you. Having a cosigner with good credit will cause you to pay less interest than going it alone.
Money For Any Reason
You can use the money from your new fresh start loan for whatever you choose to. Some borrowers use the proceeds of their fresh start loan to pay down expensive credit card debt, consolidate bills, or refinance other loans.
To apply for the fresh start loan, you will fill out an easy to understand application online by visiting the website for the lending institution or loan servicer. You may be asked to submit items to back up your application such as paystubs or bank statements, or to electronically sign your application.
Proving Your Creditworthiness
When you receive your fresh start loan – you are ready to make a fresh start in the eyes of your new creditor. Being prompt to submit your payments each month is a great way to prove your creditworthiness to your new lender. This type of positive payment history goes a long way towards getting you a better interest rate on future loans, and can save you a bundle by avoiding late fees.