Loan with Poor Credit - Good News and Bad News
If you need a loan but have a poor credit history, there's GOOD NEWS and BAD NEWS. But as I'm going to explain, it's often the case that a "good news, bad news" situation is whatever you make of it! If you find yourself in this situation, you just might find that a little effort can go a long, LONG way -- financially.
First the GOOD NEWS. Actually GETTING a loan may be a lot easier than you may think. You'll probably be surprised to learn how many lenders are willing to give you a loan. If only that were the end of the story! But the reason for this willingness brings us to the BAD NEWS.
And that is...interest rates! You'll have to "pay through the nose" in higher rates because of your poor credit. That's right! Your lender will be collecting thousands...maybe TENS of thousands of dollars more over the life of the loan...because he's got you "over a barrel" and he knows it.
Let's take an example.
Suppose you want a 30 year home loan for $100,000. If your credit is good, you might get a mortgage loan at 6% interest (depending on current interest rates at the time). But suppose your credit isn't so good and the best interest rate you can get is 12%.
Now every time you make a monthly payment, a portion of that payment will go toward paying down your original debt (equity) and a portion toward interest on the loan. The interest rate will determine how large that payment is, and what portion goes toward interest.
So how much additional money will you have to pay out in interest over the 30 year life of your loan? Hang onto your seat!
Because of your bad credit history, you'll have to pay a gargantuan $154,461.60 MORE toward interest than you would have if you had good credit and gotten the loan at 6% instead of 12%. That's over 1½ times the loan itself ...for THE SAME HOUSE!
No wonder lenders are so eager to lend you money!
But there's one other thing I haven't told you about yet. That is, there's more GOOD news...but only if you're willing to make the effort to do something about your situation.
And that is...(drum roll please)...
Fix your credit! Impossible? Not at all. It's not only possible, it's easier than you probably think.
You can hire a "Credit Repair Agency" to do it for you. For anywhere from $1,500 to $5,000 the agency will help you fix your credit and save you tens of thousands in interest payments. No, it's not cheap, and it won't happen overnight. But over the long haul, it's way, WAY better than paying the higher rates.
But an even better option is to do it yourself. Again, it's way easier than you think...you just have to know how to go about it...and you'll save thousands in fees you would have had to pay if you had hired an agency.
In a nutshell, you'll start by getting a free copy of your credit report at http://www.annualcreditreport.com/. Next, you'll select a few negative items on your credit report and write to each of the major credit bureaus (there are 3) and dispute that information as inaccurate.
Of course this is a simplified explanation of the process. The complete "nuts and bolts" of credit repair are beyond the scope of this report, but you can easily find a credit repair agency by looking in your local phone book or doing a search online. If you choose the "do it yourself" option (recommended) just get a good book on "credit repair" and get started.
Don't let a poor credit history rob you of thousands upon thousands of your hard earned dollars. Take control and fix your credit. The effort will be small...but the resulting benefits will be huge!
================
About the Author
Jim Eastman is the support contact for ErasingBadCredit.com. Anyone wanting to repair their own credit can get valuable free advice by signing up for a FREE Credit Repair mini-course at ErasingBadCredit.com
First the GOOD NEWS. Actually GETTING a loan may be a lot easier than you may think. You'll probably be surprised to learn how many lenders are willing to give you a loan. If only that were the end of the story! But the reason for this willingness brings us to the BAD NEWS.
And that is...interest rates! You'll have to "pay through the nose" in higher rates because of your poor credit. That's right! Your lender will be collecting thousands...maybe TENS of thousands of dollars more over the life of the loan...because he's got you "over a barrel" and he knows it.
Let's take an example.
Suppose you want a 30 year home loan for $100,000. If your credit is good, you might get a mortgage loan at 6% interest (depending on current interest rates at the time). But suppose your credit isn't so good and the best interest rate you can get is 12%.
Now every time you make a monthly payment, a portion of that payment will go toward paying down your original debt (equity) and a portion toward interest on the loan. The interest rate will determine how large that payment is, and what portion goes toward interest.
So how much additional money will you have to pay out in interest over the 30 year life of your loan? Hang onto your seat!
Because of your bad credit history, you'll have to pay a gargantuan $154,461.60 MORE toward interest than you would have if you had good credit and gotten the loan at 6% instead of 12%. That's over 1½ times the loan itself ...for THE SAME HOUSE!
No wonder lenders are so eager to lend you money!
But there's one other thing I haven't told you about yet. That is, there's more GOOD news...but only if you're willing to make the effort to do something about your situation.
And that is...(drum roll please)...
Fix your credit! Impossible? Not at all. It's not only possible, it's easier than you probably think.
You can hire a "Credit Repair Agency" to do it for you. For anywhere from $1,500 to $5,000 the agency will help you fix your credit and save you tens of thousands in interest payments. No, it's not cheap, and it won't happen overnight. But over the long haul, it's way, WAY better than paying the higher rates.
But an even better option is to do it yourself. Again, it's way easier than you think...you just have to know how to go about it...and you'll save thousands in fees you would have had to pay if you had hired an agency.
In a nutshell, you'll start by getting a free copy of your credit report at http://www.annualcreditreport.com/. Next, you'll select a few negative items on your credit report and write to each of the major credit bureaus (there are 3) and dispute that information as inaccurate.
Of course this is a simplified explanation of the process. The complete "nuts and bolts" of credit repair are beyond the scope of this report, but you can easily find a credit repair agency by looking in your local phone book or doing a search online. If you choose the "do it yourself" option (recommended) just get a good book on "credit repair" and get started.
Don't let a poor credit history rob you of thousands upon thousands of your hard earned dollars. Take control and fix your credit. The effort will be small...but the resulting benefits will be huge!
================
About the Author
Jim Eastman is the support contact for ErasingBadCredit.com. Anyone wanting to repair their own credit can get valuable free advice by signing up for a FREE Credit Repair mini-course at ErasingBadCredit.com
posted by Money Meister | 11:20 AM
1 Comments:
Getting the loan for low interest rate is also important for us. So I would say a credi score is necessary to make that happen. High interest rate means the income level should be more for that we have to work like a donkey...
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