Having a bad credit is not a death sentence, so cheer up !, There are financial institutions that operate with less strict rules when it comes to credit scores. It will however be deception if I told you that this opportunity comes with no price at all. The price mostly is having to obtain loans at an interest rate higher than the normal rates. This might not be a disadvantage if you have the capacity to pay.
Giving you a loan with a bad credit is a risk lenders are not willing to take, so , if you find a lender offering a loan; a reassurance of you ability to pay despite the bad credit score will go a long way. Some of the means through which you can get a home loan with a bad credit score are listed below:
PEER TO PEER ORGANIZATIONS:
A peer to peer organization is one that offers lending services by connecting lenders with borrowers, it mostly operates on-line. It is an avenue that creates a platform for a very large amount of people all over the world. a registration fee may be requested to join in some cases. The borrower may also be requested to provide some details like demographics, income and credit scores. This information is made available to a wide range of prospective lenders and willing parties can provide the loan at a specified interest rate; which is usually about 6.5% interest rate per year. Regardless of a bad credit score, lenders willing to take the risk can be found.
Credit unions are slightly similar to banks as they hold deposits, issue checks and ATM cards, make loan, offer investment services just like the bank. However, their mode of operation sets the difference. A credit union unlike banks are for non profit institutions therefore interests are invested into the system or paid as dividends to members. They charge lower interest rates and do not demand for a detailed financial history or credit score.
It operates mostly admist members in the same company or organization. This makes the application process less tedious and the loans more accessible. Credit unions also do not pay state or federal taxes so it does not cause an increased interest rate. Another way of getting a home loan is the Sub-Prime mortgage. This however, comes with a high interest rate and could attract penalties if payment is late or defaulted.
Now you know how to get a home loan with a bad credit score, nevertheless, a bad credit score is not something to boast of.
Below are tips to help increase your credit scores:
Do not expect a miracle. I'm sorry, but that is the first tip. It takes time to fix a bad credit score. So, start working it out and be patient.
the need to do this cannot be over-emphasized. Always have a payment plan.
Have a functional plan on ground before obtaining any loan, choose an affordable loan with reasonable interest rates.
Check your credit scores regularly. Request for a credit report and verify every detail. Set reminders to avoid late payments and obtain loans you can afford to pay conveniently. I write business articles to offer tips and communicate methods of cost effective implementation of business plans to stakeholders, facilitators and partners.
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FEDERAL CONSOLIDATION STUDENT LOAN
Federal consolidation student loan is the process of combining different student loans into one loan. This program is available to the student loans listed below:
FEDERAL DIRECT STUDENT LOAN( FDLP) through the department of education. The loan is procured through the students school . The types of loan available are the ; direct subsidized, direct unsubsidized, direct PLUS and the direct consolidation which is the focus in this article. The consolidation of student loans enables the borrower to pay the loan over an extended period of time.
Although, the cumulative effect of this extension could be higher interest rate, however, it enables the borrower to have the opportunity to focus on other things like buying a home as the consolidation frees up the finances.
The loan can be extended to about 10-30 years depending on the amount. If the borrower as the ability to pay off the student loan and accurately keep track of lenders , then, a consolidation might be required.
If the loans have been consolidated and a payment plan has been drawn, it does not stop the borrower from paying off the loan early by sending in extra cash earned through work or a gift to reduce the loan balance. One advantage of the federal consolidation student loan is that you can pay off the loan without a penalty and the government provides lots of protection by their policies.
A loan consolidation creates a lower monthly payment and it makes the loan easy to manage. To apply for the loan, you must have left school, graduated or reduce your credits per semester.
A 'FULL TIME' status might not give you access to the program.) THE FEDERAL FAMILY EDUCATION LOAN PROGRAM is another way of federal consolidation student loan..
It is offered by the government through private loaning companies. It is quite similar to the federal direct student loan, a 'FULL TIME' status might be a disadvantage. The loans can be from different lending companies, to consolidate it, you will need to contact your lenders or the federal government direct loan program. The program allows for a loan extension.
Applying for the above mentioned loan consolidations is quite easy. Do not rush the process to avoid errors, gather information on-line an from the experience of people involved in the program. You can apply on-line and e-sign a promissory note which is printed and mailed.
The federal consolidation student loan is very beneficial as it allows students focus more on their studies, worry less about finances. However, every student should consider all the odds before filing in an application.
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