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Deciding What to Get With a Loan and How to Get One on Bad Credit

Many people start thinking about how they can make a purchase without the money upfront to do so.

Loans are possible options for these cases. Banks and other lending companies offer loans for people they know have a good track record of paying debts owed.

Those with bad credit who haven’t had as good payment history typically believe they have no chance of obtaining a loan for the items they want.

This isn’t always the case. There are ways for individuals with bad credit to get a loan if they truly need it and are willing to work to get one.

Installment Loans for Personal or Emergency Funds

Those with poor credit should look into getting bad credit installment loans. These types of loans offer more lenient repayment plans that can help keep people out of debt.

They are the better option over payday loans that are more strict on repayment terms. Many people get these types when they’re in a bind and need money quick for personal or emergency funds.

When someone needs to pay a bill they don’t have money for, has an emergency arises that requires fast cash to pay the expense, or otherwise needs money quickly, an installment loan is the option to consider.

Auto Loan for a Vehicle

Loans are often required for automobiles. Most people don’t have the thousands of dollars it takes to buy a new or even used car. People with bad credit can still receive an auto loan.

They just have to pay a higher interest rate, receive a higher monthly payment plan, and may even require a co-signer on the application.

Anyone looking for a car loan should learn how to negotiate the price so they can walk away with a lower payment.

Many people are often willing to negotiate and go a bit lower on the total of a car if damage, dents, rust, or anything else is noticed.

Obtaining a personal loan for a used vehicle is sometimes the better option over getting an auto loan at a dealer that can have higher rates.

Loan Agreement by Nick Youngson CC BY-SA 3.0

Home Loan for a House

Homes are not cheap, and most people can’t purchase one outright. Even those with bad credit are able to achieve a home loan in some cases.

It just takes working with the realtor and bank to discover the best options to do so. An FHA loan is one possibility. While a conventional loan requires a score of 620, an FHA loan only needs a 580.

The down payment requirement may just be a larger one, such as 20% down. Using a co-borrower is another option.

It puts the bad credit applicant first but has a second person willing to vouch for them and be on the loan as well should payments stop coming in from the first applicant.

Both parties will be held responsible for the amount, so it often requires a family member who is willing to put their name on the line.

Obtaining a loan is possible no matter what type of credit a person has. Co-borrowers, higher payments, a bigger down payment, and higher interest rates may all be necessary to do so, however.

Getting a loan for a home, vehicle, emergency situation, or other personal spending requires an application and details on income, as well as a credit check.

Work with the bank or lender to get this information in promptly and receive the loan as soon as possible to start making the purchase you desire.

Featured image by Investment Zen

About Ronnie E.

Ronnie is the frugal Latina of the group. Hailing from the beautiful Andes Mountains in Bolivia, she lives and breathes frugality. She loves to figure out how to spend less money and takes on the challenge of finding great deals and cheaper options every day.

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