Bad Credit Loan -- How to Get the Best Interest Rate
by: Jim Eastman
Bad credit loans are in high demand. And if you do any research on “bad credit loan”, you’ll find plenty of advice on how to get the lowest interest rate. You’ll also find plenty of people willing to give you a bad credit loan, but you’d be making a mistake to accept it.
Unfortunately, most of what you’ll find approaches the problem from the wrong direction. The way to get the VERY best interest rate on a bad credit loan is usually overlooked or concealed altogether.
But before we continue, let’s digress briefly and look at how significantly the higher rate for a bad credit loan affects the borrower.
Let’s say you want to buy a house, but have bad credit. No matter how diligently you shop for a lender, you’re still be charged a higher interest rate for a bad credit loan than if you had good credit.
With good credit, you might get a mortgage loan at 6% interest. But a bad credit loan will cost you closer to 12%. Assuming you get a $100,000 mortgage over 30 years, the difference you’d pay in interest amounts to a monstrous $154,461.60 MORE because you have bad credit. That’s over 1½ times the loan itself!
Now getting back to our original problem, how can you get a better interest rate for a bad credit loan? The answer is probably not what you were expecting.
The solution is to “think outside the box.” The way to get a bad credit loan with the best interest rate is to NOT get one! Instead, spend a couple of months fixing your bad credit, and then look for a “good credit loan” instead.
This answer probably comes as something of a shock to you. More than likely, several objections to this approach will come to mind.
1. “I need a loan NOW” or “It’s not worth my while to wait until I repair my credit.”
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Bad Credit Loan -- How to Get the Best Interest Rate
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