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If Banks can’t provide you interest rate you want, why not apply for bad credit loans through private source?

Receiving a low interest sub-prime (or well known as bad credit loans) in the US are in fact very difficult for any borrower. Banks don’t provide low interest rate bad credit loans reason being the deposits held by banks for further offerings to general public shall not be risky and this way bank cannot take risk of hard earned money of general public. Therefore, specific private market exists for grabbing all such deprived customers who are not happy with high interest rates offered by banks on bad credit loans.

The actual rate offered by private lenders depends on type of loans, credit score received on the bad credit report (though below the good credit line) and lender’s approval. Generally the rate varies from 5% to 10%. Some of the lenders also charge enormously high (more than 400% as per reported figures) but that is when lenders are scams or robbers and not otherwise. The advertised rates can further be reduced depending on the negotiation power of borrower.

What does negotiation power mean?

The negotiation power for secured bad credit loans can be built with the amount of security one has received from valuation expert. The valuation methods depend on the type of property, the personal care taken by owners for property maintenance, the age of property etc. The better the property, the better could be price. Demand of the property in the market cans also affect the valuation e.g. homes or old antic bikes. Lenders can suggest the valuation experts or borrowers can themselves choose their own.

How much does one need to borrow?

One can maximum borrows till the total value received on the valuation exports. For home security, it is called equity. One shall however borrow only required amount if home equity is higher than the outstanding amount. One shall make a simple calculation by multiplying monthly installment amount into number of times the installments. If other loans are borrowed on the same property then the said amount needs to be deducted as well. One can also take advantage of loan calculators offered by vendors for eligibility and required amount calculation.

What term one shall choose for bad credit secured loans?

The secured bad credit loan varies from 3 to 25 years which is also negotiable with the lenders. Depending on the requirement of the amount and interest rate offered on different repayment terms, one shall select the most suitable repayment period. If other loans are already received, one shall select the large repayment period. If one needs to consolidate loans, then automatically loan consolidation loan will be received for higher repayment terms.

What are the securities valid for secured loans?

Well, there are no standard qualification criteria for security. Yes, one shall be of some value but. If not higher than loan amount then at least shall be equal to the amount of loan required. The example of security can be home, cars, other vehicles, antic properties, gold, diamonds etc.

If one loses to pay in time, then securities can be repossessed and therefore repayment is compulsory to save title rights on properties offered under security.


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