Unfortunately there are many people that have had their credit rating destroyed by the economic crisis that the world is in. That is forcing many to shop for bad credit loans and consequently having to pay exorbitant interest rates for the privilege of borrowing money.
Statistics recently released by the Administrative Office of the U.S. Courts show that the number of bankruptcies filed between October 1 and December 31, 2012 was 273,878.
This number is down 13% from 313,775 in the first quarter of 2012. Chapter 7 bankruptcies totaled 843,545, down 15% from 992,332 in 2011. Chapter 13 bankruptcies were also down 10% with 366,532 total filings compared with 406,084 in 2011.
While the number may be down it is significant when you consider the consequences.
There are some financial institutions that would just as soon not deal with the clientele that have bad credit reports.
However, there are some that specialize in providing loans and resources for those with less than perfect credit and are coming out of bankruptcy situations.
Ultimately, there is not a single best lending institution for bad credit loans. Fortunately there are many. Securing a loan with a lower credit score is really no different than if you had a high credit score.
Sure their success rate is a little higher, but the process is essentially the same. You are going to apply for credit, you are going to provide information about your income, and you are to document your income.
The biggest single factor in determining whether or not you qualify for a loan, whether that is a car loan, a personal loan, or a jumbo mortgage, is your ability to repay the loan and your willingness to do so.
Nothing else really matters.
You may be required to provide documentation as to why you were late with payments. If you once had good credit and now it is deemed because of late payments, you are basically an explanation letter away from getting a loan that you need.
Remember, you are not the only one with bad credit and needs a loan. It is safe to assume that that number of borrowers with bad credit is growing exponentially by the day.
Once you have secured your loan, and are able to make regular payments on it for an extended period of time, you can refinance loan with your new and improved credit score and lower your rate. No one plans to have bad credit. No one plans to lose his or her job.
No one ever plans to have a catastrophic financial event in his or her family. But, the fact is, life often has different plans than those that we have laid out for ourselves.
Do not despair; having bad credit is not a death sentence, contrary to what many believe. You are simply a loan application and process away from restoring your financial future.