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.
More in Debt
Celebrity Birthday Parties to Put All Birthday Parties to Shame
Celebrities are known to spend lavishly on every occasion from their huge mansions to extravagant engagement rings, so why won’t they...January 29, 2019
An Empty Nester? Here’s How You can Get Your Finances Back on Track
Having raised kids and bleeding out cash for food, school tuition, clothes, and child care, over decades is pretty normal for...January 28, 2019
Not Your Average Account: These Checking Accounts for the Wealthy offer Insane Benefits
Checking accounts are certainly not a luxury but a bare requisite for most people. There are definite variations among these accounts...January 25, 2019
How Actor Ashton Kutcher Found Success Through His Investments
When actor Ashton Kutcher was brought in as a guest ‘shark’ on the TV show, Shark Tank, many viewers were confused. ...January 24, 2019
Americans Have Taken a Record-Breaking number of Personal Loans in 2018
Private Debt has been burgeoning in 2018 and while some say that credit is spinning out of control, there are different...January 23, 2019
The Way The Rich Look at Wealth is Very Different from How We Look at It
Steve Siebold, a self-made millionaire spent almost 26 years interviewing the richest people around the globe before noting them all down...January 22, 2019
You’d be Surprised how Crowdfunding and State Interventions are Tackling ‘Lunch Shaming’
Charity is in, for the holiday season, in 2018, sending clothes for the poor and donating food to soup kitchens, repaying...January 21, 2019
Celebs Who Made Amazing Property Investments
We don’t need to tell you that most of the Hollywood bigwigs are filthy rich. So rich, in fact, that they...January 18, 2019
The Ingenious Way a Freelancer Paid Off Her Huge Credit Card Debt
Nicole Hardy, 42 planned a year-long, round-the-world sailing trip, but her finance and debt payments were covered by the final installment of...January 17, 2019