It is actually possible to find legit bank loans for bad credit. The most important preparation is to make sure you know why you need the money for before applying to the banks for a loan, because you need to be careful and get the approved for the right type of personal loans. If you have bad credit and need to borrow more money, you are taking a risk of making your current financial situation worse and not improving it for the better.
Going to the banks personally and asking for a loan with poor credit history can be an embarrassing affair. I will hate to explain to the loan officer why I have defaulted on a loan or have unpaid credit card bills, and still end up being turned down. However, it is important that you have an honest and valid explanation for all negative items recorded on your personal credit report. This will help to convince the lender or a loan broker that can help arrange for a suitable loan company that give will you a legit bad credit loan. There is no point in hiding your poor credit ratings when the lender runs a credit check on you. This only wastes time as well as further lower your FICO score as many successive credit checks is considered suspicious activity.
The easy and fastest way to get available bank loans for people with bad credit is to borrow against collateral and valuable assets. If you own a home or car, it will be easy to borrow a big loan against your house up to $200,000 etc. The actual amount depends on the amount of equity you currently own in your property unless it is fully paid. Getting a secured bad credit bank loan has a lot of advantages and is actually low risk despite your fears of losing the house or car to the bank.
We usually recommend you low interest secured bank loans to people who needed to borrow a lot of money but has poor credit history. But if you do not own any assets, the next best option is to ask someone with good credit to be your cosigner. You can ask your broker to recommend some credit unions or banks that give unsecured loans with cosigner options. The problem here will be finding someone willing to trust you and be your loan guarantor.
Unsecured Signature Loans From Banks
Generally speaking, it is not easy to get unsecured bank loans for bad credit because most traditional lending institutions like banks and credit unions tend to decline individuals with poor FICO score due to the higher risk of default. For ex maple, not many banks will provide bad credit signature loans since you need to have good credit and stable employment or income to qualify. The best rates for unsecured signature loans from banks is around 15% a year.
However, private banks who are not members of the FDIC are willing to give high risk signature loans to borrowers with bad credit because they are not limited to the same maximum interest rate limits. The catch here is that if you want to get an unsecured bad credit bank loan, be prepared to pay high interest rates compared to borrowing against your home equity.
For some people with damaged credit history, they are not necessarily borrowing money because of financial emergencies. Instead, they just want to build up a series of good financial activities on their credit reports such as timely loan payments and responsible use of personal credit. The amount of revolving credit is a very important factor that determines your FICO score, but make sure you do not touch the borrowed money. Just pay it back in full with interest before the due date. If you are late, then all your credit restoration efforts will be in vain as all your previously timely payments will be nulled by just one late payment.
If you have used any form of debt consolidation or settlement, you are likely to have zero revolving credit as a consequence for negotiation a cheaper debt principal with your creditors. At this stage, you can consider applying for legit bad credit loans to repair your credit score.
By now, you may think it is difficult to get a cheap bank loan for poor credit when you have no assets or high stable income. Actually, it is easy to get car loans with poor credit from banks. Here, the vehicle you are financing becomes the collateral and the bank can easily repossess and resell if you stop your monthly payments.
Always think through before you take a high risk bad credit loan. When there is no need for an instant or guaranteed loan with no credit check, postpone the borrowing and take steps to rebuild your credit first. This allows you to get cheaper legitimate bank loan rates and save you money. It also protects you from defaulting on expensive bad credit unsecured loans that many people find themselves not being able to afford.