If you have a horrible credit score (less than 600 on the FICO scale) then you are consider to have extremely bad credit. Bad credit can be a big backset in life and can hold you back from getting the credit that you need, even for purchases that must be made immediately. Many people have developed a bad credit score due to the global financial crisis and associated job loss and layoffs that have affected so many folks. Or perhaps illness or injury prevented you from working, and your credit slipped as a result. No matter what reason you may have for your extremely bad credit score, there is a loan product that is designed for people in your situation. In fact, you can borrow as much as $5,000 on an extremely bad credit loan with special lenders who want to help you get your life and your finances back on track.
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Money For All Purposes
Extremely bad credit loans provide money that you might need for any possible purpose. Many bad credit borrowers with horrible credit find that these loans are useful in helping them to catch up on their due bills, pay off their credit cards to avoid high interest, or to make large purchases like furniture or appliances, or even car repairs or a vacation that is long overdue. Special lending guidelines that are set up for these loans allow these lenders to provide you with funding, even if you have experienced bankruptcy, foreclosure, liens, divorce, or judgments against you.
Applying For Your Extremely Bad Credit Loan
The loan products that are available for bad credit borrowers have been designed to meet the unique aspects that the bad credit borrower presents. Many loans are available for those borrowers who wish to put their home or other valuable asset up as collateral against the loan. This is known as a secured loan for bad credit and is by far the easiest to obtain because the lender associates less risk with loaning you money, which means that they are more willing to accommodate your request. Because there is less risk involved with a secured loan for bad credit, most lenders are very lenient with the rates of interest that they charge on these loans as well, which can save you hundreds of dollars over the course of the loan repayment period.
Unsecured loans are also available for bad credit, and you do not need to pledge collateral for this type of loan. Unsecured loans are riskier for the lender, however; he has nothing to fall back on if you should default on the lending agreement. Because of this, the unsecured loan for bad credit borrowers is much more expensive when it comes to paying interest because the lender is compensating for the risk that is taken. When at all possible, opt for the secured version of the bad credit loan.
Cosigners Can Lower Interest
If you have no collateral, you may be well advised to take out a loan alongside a creditworthy cosigner. A cosigner can be anyone who has established a history of good credit and is willing to sign alongside you on the bad credit loan, basically agreeing to cover the loan if you fail to do so. The cosigner can oftentimes be released from liability to repay, called early liability release, if you honor your lending agreement terms for a period of time when the loan is first written – typically making six months of payments or more. At that time, your cosigner is no longer responsible for repaying your bad credit loan.