Archive for

Personal Loans For People With Bad Credit: How to Get More Than $5,000

The need for a cash injection is not exclusive to people with poor credit ratings. Everyone can do with a few thousand extra in their wallets, whether to pay for college fees, clear a credit card debt or pay for a vacation. The problem is when the sum needed gets lenders nervous. But personal loans for people with bad credit solve that problem.

There can be any number of reasons behind the need of a relatively large sum of money – more than $5,000, for example. But an applicant must show that they can afford the loan, and meet repayments. Only then will a lender feel confident and getting loan approval become a strong possibility.

While it is true that traditional lenders typically set poor terms for bad credit borrowers, there is a variety of alternative lending options open to providing a sum of $5,000 or more. Indeed, even large personal loans can be accommodated, and at affordable terms.

Students Have Lending Options

Paying college tuition fees and living expenses can be a huge challenge for the college-goer. In fact, students are always in need of extra funds to finance college living. With no income, it can be very hard to get the funding necessary. Thankfully, there are personal loans for people with bad credit specifically designed for students.

These loans allow students to pay their fees and keep themselves housed and fed, but without burdening them with immediate repayments. In fact, repayments are delayed until after graduation. Also, getting loan approval is pretty easy once the applicant proves he or she is a student and is in need of financial assistance.

But like any large personal loan, the debt will need to be paid eventually. Once graduation comes, the pressure to pay begins – though it is possible to refinance these loans if the pressure is too much.

Family Financing

As personal loans for people with bad credit go, the best loan option is often closer to home. Approaching a member of the family for a loan can provide the most cost-effective solution to the need for extra cash. Usually approval is all but certain, with the only concern being whether or not a family member has the money on hand to lend.

Of course, getting loan approval is not the only concern, with family members still expecting the loan to be repaid. This means a repayment schedule will need to be agreed and signed up to, ensuring there is no confusion over the issue. And because it is a family loan, there is often no interest charged on the deal.

Still, this kind of loan does rest on the idea that a family member has the funds to spare. Perhaps $5,000 is no big deal, but large personal loans can sometimes be too much for them to source.

Payday Loans

In terms of interest rates and loan limits, payday loans are not the best option. But there is no denying that as a source of fast emergency funds, they are hard to beat. They are also arguably the most accessible personal loan for people with bad credit, with credit scores ignored and approval resting on income only.

However, besides the very high interest rates that are usually charged (sometimes 35%), they are also limited to $1,500. This means they are not enough to handle any major debts. A series of loans may be necessary to make up the required sum, but getting loan approval on so many deals can prove very expensive.

It may be possible to get a larger sum, and repay over a 90-day period rather than the normal 30-day term. However, this is also likely to be very expensive. And with no large personal loan available, applicants only have the speed of this option to fall back on.

Personal Loans for Students

Going to college is not cheap, and neither is the expense of living while studying. Many students that are low on cash have a job while they study but at times that is not enough. When it comes to tuition, loans are out there for most students, but even those cannot quite cover everything. Those going to college for more than four years have higher tuition and living costs which even a full-time job will not cover. There are personal loans for students out there, but use caution when securing them. They can be helpful, but they can also be costly if you underestimate what happens when you do not pay.

Personal loans for students are a bit different than government backed school loans. You have many options with student loans including deferment, income contingent payments, and in some cases, loan forgiveness. However, you may not have such options with personal loans students may take out on their own through a bank or credit union because they do not have enough coming in to support their tuition and their living expenses, even if they are working. Repayment starts immediately without a grace period and while you are still in school.

Many students find that private personal loans for students are much harder to get than traditional student loans. This is because you have to prove that you can start to pay back the loan right away. If you have a decent job, this will help. However, those in school first time probably do not make a lot of money each week. Also, you have to have decent credit. Often, students do not have many strikes against them on their record, but they also do not have any good credit. This makes it harder to get that loan.

Before getting this type of loan, students should shop around. Some have no choice and will be lucky to get one offer, but others may have a few options. Ask for better interest rates and better repayment plans so that you do not have to take out more personal loans for students to cover the first one that they took out to help with living expenses, tuition, or whatever it is that they needed. Interest alone can make or break a student just out of school trying to pay back hefty loans they needed for college.

At times, you may be asked for collateral for personal loans for students. Do not put anything down for this type of loan that you really cannot live without. If you put on your car, and you miss enough payments, they will take your car. How will you get to work without it? Instead of doing that, search until you find a better offer or realize that you have to find another way to get the money you need. Bring in a roommate, take on another part-time job, and look for a smaller loan. This can help tremendously in the long run. Loans can be great tools to get started in life, but only if you can comfortably afford to pay them back on time.