Everyone Deserves a Second Chance, Even Those in Debt
There are times when some of us can really use a second chance—loan applications, included. After all, financial mistakes and debt are really not at all that uncommon. Perhaps you had an unlucky period in your life and you ended up having to file for bankruptcy. Or maybe you had a big emergency and you ended up missing a few credit card or loan payments. You may even be new to the country, and you are still in the process of building up a credit history. Whatever the cause of your dilemma, you and your finances definitely should not have to suffer for it. Even more so if you have been trying to restore order to your chaotic finances. Indeed, a second chance is what you need—a second chance finance, that is.
The second chance you’ve been looking for
Also known as bad credit loans, second chance finance is basically a kind of secured loan that is most appropriate for those who encounter difficulties in applying for loans, such as those with bad credit history and existing debt. You may already have encountered several rejections by various lenders, if you are in this less than ideal situation. Eventually, though, you will find a lender who will be willing to take on your case, so do not be discouraged. However, you need to be ready to bend over backwards because these lenders will need to examine your eligibility for a second chance loan with a fine-toothed comb. Not only that, you also have to be prepared to accept considerably higher interest rates which normally come hand in hand with second chance loans.
Life after bankruptcy
A full year after you have been discharged from bankruptcy, you will already be technically eligible for a new loan. Before you can even be considered, however, a lot of things will need to be substantiated as a lender requirement. First, an explanation of why you went bankrupt in the first place will be asked from you. Next, you need to demonstrate that your current savings are in good shape and that you have little to no existing debt, so you will have to present bank statements. Lastly, you also have to prove that both your residence and employment situations are presently stable.
Know what’s expected of you
If you are able to provide a collateral for the loan, you may be able to qualify for a lower interest rate. This would also reduce the loan amount, so the risk undertaken by the lender will be reduced considerably, making them a tad more lenient. This can be a trade-in, or an outright cash deposit. You may also be considered for a loan with normal or lower interest rates if you were able to keep up with your existing loan payments while you were bankrupt. And although these are known to have considerably higher interest rates, a subprime loan is also another option that you can consider.
Having bad credit is not the end of the world
Some lenders also offer no credit check loans, which is very beneficial for those who have non-existent or just downright bad credit. As the name suggests, this is essentially a loan wherein lenders do not perform credit checks. However, this is a very costly option because of its sky high interest rates and a myriad of rather hefty fees. To further minimize the lender’s risk, you may even be required to shell out a minimum cash deposit. If you add it all up, you may find yourself paying a great deal more than the market value of your car. A no documentation loan is also another alternative. However, this is predominantly offered for business purposes.
Suffice it to say, if you want to acquire the second chance finance that is most beneficial for you and current circumstances, you need to know your options and may even get professional advice. But do take heart that there are, indeed, options available, so you need not be held hostage by your debt and dire circumstances. As they say, there is always light at the end of a tunnel, and in this case, second chance bad credit loans are shining beacons of hope.
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