Bad Credit Loans…Don’t be Afraid!

If you have bad credit, then there is nothing scarier than trying to get a loan. There are a lot of loans out there and there are lenders and loan brokers who specialize in helping people with bad credit so that they can eventually get approved for loans. Bad credit loans are split up into several categories. These categories include: personal loans or lines of credit, business loans, car loans, home equity loans, and mortgage loans.

Loans require several things and each bank or lender of loans may have separate requirements.  General requirements when applying for a loan are: good income, an income to debt ratio that allows you to pay all of your monthly obligations with money left over, the last two years tax returns, two months of bank statements, and the last two pay stubs. For business loans or people who are self employed, the lenders of loans usually require the last two years tax returns, two years worth of bank statements, and at least one year’s Profit and Loss statement. Some will also require a business plan, depending on how long the business has been in existence. It is best to include all of this information with the application form right off to prevent delays and possible denial of your loans for lack of information.

Some banks and lenders come up with new names for their loans, such as Home Improvement loans. If you read between the lines, these are usually fall into one of two categories…home equity loans or personal lines of credit.

The speed at which you can get your money depends on several factors. Some bad credit loans, like personal loans or lines of credit, close much faster than loans like mortgages. Another deciding factor is the size of your bank. Small banks tend to close on loans faster than the big national or even international banks.

Of course, the biggest worry on your mind is going to be your credit report and how it will affect you getting a bad credit loan. If we were all to be honest, most people to not have perfect credit.  Lenders and banks know how to look past a lot of things to get the real financial picture of the prospective borrower. 

However, there are some things you can do ahead of time to clean up your credit report and put your best foot forward with the lender.  These things include paying off some of the small things such as those video store late fees and writing letters to the reporting agencies to clear up any errors on your credit report. Most people have charges from purchases that they did not make appear on their credit report. For the most part, these errors can be cleared up with a simple letter to the agency.

Other obvious things such as not telling the lender your entire sad financial story can also improve your chances of getting a bad credit loan. To get a very good idea within a few seconds you can try this simple loan calculator which works pretty nice by you just sliding your mouse to adjust the annual interest rates, your principal amount and the loan period you plan for.