I often get asked whether it’s possible to get a loan when you have had credit problems in the past. That’s a common question because many people have had credit issues that show up on their credit report. And these same people are affected by the bad economy just like the rest of us and may need to borrow money – whether its for a house, car or other type of item.
The answer is that you can indeed borrow money. If it’s a short term cash loan such as through Money Mutual where you are connected with a participating lender and bad credit is OK. If it’s a long term loan like a mortgage you can still qualify but you may be faced with a larger down payment and higher interest rate if you have credit issues. So for this type of loan it may be important to review your credit history and attempt to clean up any errors in advance of submitting your application.
Before you apply for a loan at a bank or other lending institution – shop around as they offer different interest rates. Also if one institution turns you down try another as they all employ different criteria as to what they deem important for qualification. If you are unhappy with one institution’s level of customer service then find another. You are after all their customer and they make their money from you.
If it is a mortgage loan you are shopping for then you may want to investigate those offered by the Federal Housing Administration (FHA). These types of loans often favor those with credit problems. They also offer lower down payments – some as low as 3% compared with conventional loans which traditionally run at 20%.
Once you have decided on a lender then you will have to submit an application. You will also have to supply much in the way of support documentation including proof in income, bank statements, and two years of tax records. These days this is just the start and you will probably be expected to provide other types of documentation when your paperwork gets to the underwriter (the person who makes the final decision on your application). The underwriter will also look closely at your debt to income ratio to make sure it is favorable.
At the present time interest rates are at an all time low – and so it’s a great time to take out a loan for a home or vehicle. And its also a great time for a short term cash loan if your needs are more temporary.
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