How to Get Bad Credit Installment Loan Approval Today

A history of missed and late payments makes it far more difficult to get a bad credit installment loan approved than it used to be. This is because customers who have previously defaulted are far more likely to do so again in the future. Lenders don’t just perform credit scoring in order to decline customers, they regularly do so because they use a tiered lending structure. Cheap bank loans are offered to those individuals who are considered a minimal risk. Although a low APR loan for poor credit is now unlikely, it is still possible to borrow money with bad credit at a higher rate of interest.

Steps to Take Before a Bad Credit Installment Loan Application

Poor credit shows on a credit report for a period of not less than 7 years in America. In the case of chapter 7 bankruptcy, it shows for 10 years. That isn’t to say that a credit score remains constant throughout that timeframe because it doesn’t. There are a number of legal credit repair methods that can be used to rebuild credit ratings more quickly. Although accurately recorded adverse credit cannot be removed, there are things that can be done to improve a credit score. Prior to applying for a bank loan for bad credit, check for credit report errors and optimally redistribute revolving debt to get the best possible rating.

Low Cost Family Loans for a Bad Credit History

If in-between jobs or unable to offer the lender collateral, the most effective way to get the best loan rate is by borrowing money from a member of the family. The majority of close friends and family members will be prepared to offer an interest-free loan which makes it the perfect bad credit installment loan for those who are seeking to minimise repayments. The main problem is that default is likely to cause friction further down-the-line. If experiencing difficulty repaying a low cost loan, it is better to talk to that person rather than just hoping the situation will go away on its own.

Door Step Lenders Offer Bad Credit History Loans

It may be possible to get unsecured poor credit loan from a doorstep lender, such as Provident Financial. They offer small bad credit installment loans for up to £500 to customers and then collect payment each month for a defined term. The rate of interest is typically in the region of 270% per annum. With rising default rates, the rate of interest is unlikely to change in the near future. Beware of dealing with other credit sharks as their recovery practices are not only unscrupulous, they are also highly illegal.

Secured Bad Credit Installment Loans for Homeowners

In order to underwrite the risk of default, many lenders are still prepared to offer bank loans for bad credit that are secured against the properties equity. Home equity is defined as the difference between the value of a property and the mortgage loans, as well as any liens, that are secured against it. Customers can take out a standard low APR loan or second charge over a period of time that is as long as the mortgage itself. The main danger associated with a secured homeowner loan is that, failing to keep-up with the repayments, could lead to the repossession and sale of the family home.

Low APR HELOC Loans for Bad Credit Scores

A HELOC loan works in the same way as a secured bad credit installment loan in the sense that the customer borrows money against the available equity. However, it is a low APR credit facility which means that interest is only paid on the money that is used. It is a source of revolving debt, like a secured credit card facility. Due to the risk of foreclosure, default rates amongst borrowers are extremely low. This allows adverse credit lenders to offer very competitively priced low APR loans to potential customers.

Are Bad Credit Installment Loans Worthwhile?

Few lenders, other than payday lenders, offer poor credit loans because default rates are extremely high. Even person-to-person lenders, such as Prosper.com, have been forced to stop proving them due to legal action by investors. Aside from borrowing money from a member of the family, the only way to get a low APR loan is through the provision of collateral. The problem is that failing to keep-up with the repayment terms will result in the repossession and sale of the property in order to recover the money. It is important to think carefully before securing a loan against property, especially if already struggling with debt.

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40,000 Mass. College Students Left Without Loans

Massachusetts college students who have worked hard through high school and on their SATs and college essays just received another challenge: finding loan money. The Massachusetts Educational Financing Authority (MEFA), which has been providing student loans to Massachusetts residents for the past 26 years will not be lending any money to college students for the fall semester. This news comes well after college financial aid applications are due, and is leaving new and returning college students without private loans.
To give you an idea of the scope of the problem, last year, MEFA was the source of $510 million in loans to Massachusetts students attending college. MEFA provides private lending to Massachusetts residents attending colleges in-state and out-of-state.

“At this time we regret that MEFA has been unable to secure funding due to increasingly difficult capital markets conditions,” Tom Graf, Executive Director of MEFA wrote in the announcement.

Massachusetts Educational Financing Authority (MEFA), a non-profit organization, had been offering Massachusetts college students and parents which were both low and fixed. According to MEFA, they will are still trying to secure funding for spring semester loans.

What Massachusetts Students and Parents Can Do

This is a huge red flag that indicates our economy is continuing its downward spiral. The money these students were counting on was not free money or scholarship money. It was loans. Loans they have to pay back with interest. Now they can’t even do that. MEFA assures students that there is other money out there. But now that college students are about a month away from the beginning of school, and have their college bills in hand, where can they turn so late in the game?

1. Call the MEFA Hotline

MEFA has a toll-free number for Massachusetts college students and parents to call for information. The phone number is 800-809-0571.

2. Seek a Federally-Funded Loan

MEFA also recommends that students and/or their parents attempt to secure a federally-funded loan first.

3. Contact the School’s Financial Aid Office

The school’s financial aid office should also be able to provide information to Massachusetts college students and parents who are left without loans.

4. Ask for an Extension

Massachusetts college students and parents who were relying on a MEFA loan should call the bursar or payment office at the college and request an extension on the bill or ask for a payment plan Massachusetts colleges should be aware of the situation.

5. Contact American Student Assistance

The Loan Information Center at American Student Assistance (ASA) may be reached by calling 800.999.9080. According to the ASA, Federal Family Education Loans are still available to college students.

6. PLUS Loan

Parents of college students may also consider applying for a federal PLUS loan.

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Refinancing Loans Vs. Home Equity Loans

If you are a homeowner, there are many loan products that can work to your advantage; sometimes the most difficult part is picking the right product that fits your needs the best. Two loan products that are extremely popular are refinancing loans and home equity loans. Here is some information on both their similarities and differences.
Refinancing loans is usually the process of taking out a second loan in order to pay for the older loan, using the same property as collateral. The major advantage for refinancing your home is to benefit from a lower interest rate or better terms. Many homeowners purchase homes when they either had a lower credit score or when the market offered only higher interest rates. If your current credit score has improved or the banks and lenders are offering much lower interest rates, a refinancing loan may be a great way to lower your monthly payments, effectively reducing the amount to repay.

A home equity loan is similar to a refinancing loan in that you use your home to secure the loan and if you fail to repay the loan, the bank can sell your home to recoup its losses. However, home equity loans are usually not for the entire value of the home, but only for the equity (equity is the current value of your home, less any debt). For most homeowners, the use of home equity loans is different than refinancing loans. Homeowners take out equity loans to make big ticket purchases such as additions to a home, tuition for college or to renovate a kitchen. While there are cash out options for refinancing loans, most refinancing loans are to save money and not to use the equity that has appreciated on their property.

Home equity loans are usually a little less expensive, due to the fact that less money is being loaned. While fees such as closing costs and the appraisal are similar to a refinancing loan, there are usually no points involved. For refinancing loans a fee called points can be requested by the lender or bank. A point is usually equal to 1% of the loan amount and it is not uncommon to be charged by the lender 2, 3 or more points to refinance a loan.

The great part about being a home owner is the many options that are available to you; however, it is always important to make sure you consider all your options to find the one that best fits your needs.

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