Loans
23/7/2012
Introduction
Most of the borrowers opt for personal loans when they are unable to meet their immediate financial demands with the funds they have. And what do we mean by bad credit? Bad credit means when borrowers who have already taken unsecured loans from creditors in the past, have failed to repay back the loan amount on time. In such cases, usually a second loan might not be sanctioned mainly because their names are already flashed across all banks and financial institutions and hence, they are given the tag ?bad credit?. This way, whenever they approach any financial institution to apply for a loan, it automatically gets rejected.
Those who have a bad credit in the market are not criminals. There can be various reasons why common people fail to repay back their loan amount. Some of the reasons can be unexpected additional expenses due to an accident in the family, losing a job etc. During such situations, borrowers might require some time to solve their immediate problems after which they will be able to pay their installments.
This article will help such defaulters apply for secured personal loans in spite of having bad credit. Read on to learn more about it.
Options
Some of the different options for applying secured personal loans for bad credit scored people are as below:
If the borrowers have valuable assets in their name such as property, vehicle, jewelry they can apply for secured loans against hypothetical of these movable and immovable properties. Banks and financial institutions will sanction the loan in spite of the fact that the borrower is having a bad credit in the market. Another important factor to be noted here is that the rate of interest is low in such cases and even the repayment period is more. One must remember that when a collateral security is provided, the amount of the loan that is sanctioned is higher as compared to unsecured loans.
- Secured Loan Applied By A Family Member
People with bad credit can request any of their family members to apply for a loan on their behalf. This can take place only if the family member agrees to sign the loan document.
Main Benefits
Some of the main benefits of applying for secured personal loans are:
- Convenient Application ? Since the bank or financial institution is holding back your movable or immovable property before sanctioning the loan amount, they will be able to complete the paperwork very fast.
- Long term payment ? When collateral security is provided, the repayment period of the loan can be very high as compared to unsecured loans. Moreover, the interest rate too will be very low.
Conclusion
Borrowers can now be relieved from availing personal loans in spite of having a bad credit in the market. The best way to approach a creditor is to search for a bank or a financial institution through online search. It is advised to contact a minimum of 3 to 4 banks or financial institutions and find out which company provides a maximum loan amount with minimum interest.
(examples: auto, banking, college, credit cards, debt, frugality, insurance, investing, loans etc.)
Article by Chris D
Chris has written 313 articles .
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Source: http://www.fullfinance.com/avail-personal-loans-against-collateral-security/
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