Cool Article On Bad Credit Mortgages

I have never claimed to be an expert on bad credit mortgages, in fact I know very little about them. Over the last two weeks I have been trying to learn about them and have found a few nice articles on the subject. There's a very cheesy looking site that has impressed me with their ability to teach about loans and on that site I found a really cool article on the subject of bad credit mortgages. Here it is: Mortgage Loans For People With Bad Credit. The article should help you out quite a bit - it did me.

Bad Credit Personal Loans

In summary, bad credit personal loans are generally not a good idea, unless you can get approved for a signature loan. Run for the hills if payday loans are the best option, it's honestly probably smarter to not pay your bills. Payday loans can get you into a world of hurt.

Never take out payday loans or loans from 'Sharks'. These guys are offering something very similar to payday loans in that they will charge insane interest. Never, and I mean NEVER get loans that have interest this high. The absolute ceiling for interest on a loan should be 20% and even 20% is too high for most cases.

Signature Style Personal Loans - Not For Bad Credit

Signature loans are rarely approved for individuals with bad credit. This is simply because credit is the premise for a signature loan in the first place. The nature of signature loans is that there is generally no collateral attached when the loan is taken out. Therefore, a person is simply giving his/her word that the loan will be repaid. Obviously this is too risky for the bank if the person has a reputation for not paying bills and a person with bad credit obviously falls under this category.

If you're looking for a signature loan and you have bad credit, there's only one thing that can be done - find a cosigner. Sorry if that's not what you want to hear but any bank that would give a signature loan to a person with bad credit wouldn't be in business for very long.

Auto Loans Are NOT Personal Loans

I get asked from time to time about personal loans for cars. These loans do not exist and I find it quite funny that people look for them. What they are usually looking for is private auto loans - not personal auto loans.

Private loans are often available for cars but you'll have to find a private lender in your area. Sometimes the best loan providers of this type are friends and family members. Generally speaking a private lender will charge you more interest than a bank - unless they are a friend or family member. Friends will usually give you a good deal and family will often give you a private loan for free. Banks and other private lenders will not.

Personal loans are generally loans like signature loans and payday loans - loans that you take out with no collateral. When you take out a loan on a car you will always have a lien on the car until it's paid off.

Payday Loans - The Only True Bad Credit Personal Loans

Often people search around for bad credit personal loans and have no idea what they're really looking for. Well....it turns out that most of the time they are looking for loans that couldn't possibly exist. They want a low interest loan with no collateral or credit check. If I could profit from loaning under those conditions I would be the richest man on planet earth because everyone would want one of those loans.

The honest truth is that a bank can't afford to take that kind of risk on people with bad credit. This makes some people mad but let's be honest - if your credit is terrible it's because you have a habit of not paying your bills (or not paying them on time). This is a lot of extra risk for a lending institution.

Payday loans get away with loaning money to random people with bad credit because the interest charged on payday loans is extreme. They make so much on the people they loan to, it covers the cost of some loans not being paid back. This model has been working for years, but honestly these loans are terrible for the consumer. I would stay away from them if it's at all possible.

Stay Away From Bad Credit Personal Loans

This year I have done a ton of research about bad credit personal loans. There is a lot that people don't understand about these loans and honestly I hope that people will dig in to learn a little before they use them too much.

The most common type of bad credit personal loan is the payday loan. If you take out a payday loan, you can expect to pay about $10 for each $100 you borrow - per month. If you figure out how much that compounds over a 1 year period, you'll find that you're paying over 1000% interest and that is a load of interest.

I would highly recommend getting any type of loan you can from the bank itself - even if you have to put down a car or your home as collateral. This will save you thousands on interest and will also help your credit score. Most personal loans don't do this with the exception being signature loans from a bank which are sometime classified as personal loans