Category: loans

Too many times people seem to think that just because they have bad credit they are not able to get a loan, however this is absolutely not true. In fact, there are specific loans out there that are designed and used just for those people who have bad credit in particular; therefore, if you do have bad credit, you should not feel as though you are at a loss, because there are loans such as the bad credit secured loan for you.

What is the Bad Credit Secured Loan?

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Basically the bad credit secured loan is a loan which allows people who have a not so great credit history to be able to get a loan for whatever reason, and the reason that the bad credit secured loan is viable is because the lender has the benefit of security, and so, regardless of what that actually is, the lender can still feel comfortable in giving a loan to someone with bad credit because they know that they are able to get reimbursed even if the borrower ends up not being able to pay them back themselves.

A bad credit secured loan is a great financial solution for an individual who has bad credit and who may or may not have any collateral pledge against the loan, such as an automobile or a house for instance. A secured bad credit personal loan will require the borrower to pledge collateral against the loan, and then in the event that the borrower does not pay the loan back, the lender is able to claim the collateral to make up for the outstanding loan balance.

As well, since the lender has some collateral, the interest rate on a secured bad credit loan will likely be less than that of the interest rate on a non-secured bad credit personal loan, and so this is obviously an incredibly positive thing.

If you are interested in getting one of these loans, then the first step that you are going to have to take is to go into your bank, where you should speak to a financial advisor, who will be able to help you figure out the best type of loan for you, and as well from here they will be able to help you out throughout the rest of the process, and so this will be incredibly helpful as well.

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Since cars are usually the second largest asset people will acquire during their lifetime, an auto secured loan is typically how they buy one. This type of loan is called a secured loan simply because the amount you are borrowing to purchase the vehicle is secured by the title of the vehicle. That is the title may be in your name, depending on the source of your auto secured loan, but the lender is listed as a lien holder on the title and cannot be sold while you still owe money on the loan.

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Your credit history will determine not just the interest rate you will be charged on the loan but also how much security the lender will want before you get the car. For example, a person with a perfect credit history may be able to obtain an auto secured loan for the price of the vehicle, and the lender will not consider the depreciation on the vehicle once you drive it off the lot.

A person with less than stellar credit, but still not bad, will usually have to provide a down payment to reduce the amount of the auto secured loan to an level that will be lower than what the car will be worth when it leaves the lot, typically about 70 or 80 percent of the value.

Lenders Protecting Their Financial Interests

Should a borrower default on an auto secured loan the lender has the right, under the law, to recoup their losses. Usually, if the vehicle is taken back by the lender after a certain amount of time, which varies from state-to-state, they can sell the vehicle and any difference between what you owe on the loan, plus reasonable expenses for recovering the vehicle, selling it and legal fees and what the vehicle sold for will be your responsibility.

Before you take out an auto secured loan you should carefully check the company with which you will be doing business. The Better Business Bureau in your area can caution you if a company has complaints concerning predatory lending practices and how well they follow the agreement they made with the customer at the start of the deal.

However, unless you are prepared to pay cash for the vehicle, there is a good chance that an auto secured loan will be how you purchase a vehicle. Caution is advised to make sure the lending company is legitimate and ethical in its dealings.

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