Most consumers are already aware of the negative repercussions of a bad credit rating. In some cases, just being late on one credit card payment can result in immediate, higher interest rates. Bad credit also adversely affects the interest you can secure on mortgages and loans. It is therefore critical, that consumers become more vigilant in both monitoring their credit rating and keeping their credit scores within acceptable ranges.
One may reasonable assume, that from the proliferation of television and Internet advertisements offering bad credit loans, that persons with bad credit are actually being enticed to apply for loans, mortgages and credit cards. After all, why should someone with bad credit be forever shunned by creditors, simply because for some unavoidable circumstance, their credit score is not where it should be, ideally? But consumers with poor credit are still consumers and potential customers in a competitive market place. And doesn’t everyone deserve a second chance? Second chances are available for those with poor credit even though it may cost them higher interest rates. It offers, however, an opportunity to reinvent one’s self and to revamp a damaged credit history.
One thing you want to avoid is the predatory loans that abound out there. You want to ensure that the bad credit loan you obtain, does not come with excessively restrictive conditions and outrageously high interest rates. Seek out reputable banks, credit unions and finance companies they are all lenders of bad credit loans. There is no need to seek out a loan shark for this purpose. To get this loan, however, you have to pledge something; an car, real estate, or even collectibles. These are called Secured Loans and has made getting a bad credit loan much easier today. But even though secured, the fact that your credit is less than stellar, can result in a higher interest rate.
Another factor that affects the interest you pay is if you do not have property to pledge. Unsecured loans are high risk loans to the lender, so they protect their investment by limiting the amount that you can borrow and set interest rates in accordance with how bad your credit is. In these cases, the interest rates then become generally higher than with secured loans. Not only will the interest rate be higher, and the amount you can borrow limited, but the time allowed to repay the loan will be also be shorter. The interest rate continues to rise depending upon how bad your credit is. Your credit history is what the lender assesses to determine the interest rate to charge.
When it comes to emergencies, there is no discrimination and both those with good credit and bad credit may need a quick, emergency loan to get them out of a bind. For those with some security, there are more options, for those with none, the options are lessened. Payday loans offer a choice to acquire emergency funding, and say what we want about these types of loans, it is the only choice available to some. Payday loans are immediate and available to anyone, even those with a poor credit history, provided they have a job. Their interest rates, however, are excessively high and the borrowers can expect to pay upwards of $30.00 on a $100. loan.
It almost seems unfair that those with poor credit are taxed heavier with higher interest rates and more restrictions than those who have good credit. On the other hand, we can look at it as a reward for maintaining a good credit score and a slap on the risk for those who have not been quite so vigilant in the credit arena. Hopefully, the burden of being subjected to these restrictions may serve as a catalyst in helping to repair bad credit which can only over time and with the exercise of good judgement and self control.
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