For any type of credit, the bank or the financial institution that is supposed to give it, will interrogate the three most important Credit Bureaus, to determine the eligibility and the capacity to pay the loan back for the respective client. Some of those clients will have a bad situation, therefore they will not qualify for such a facility, but there are solutions even for those clients. Indeed, some companies offer the bad credit loans guaranteed approval, even if the client has a negative history with credits.
How to get this loan
The loan is not simple to contract, and the sums offered through this credit facility are definitely a lot smaller, compared with the sums that can be taken through a normal credit facility. They are a lot more expensive, simply because the client comes with an increased risk for the bank! As long as the client was not able to pay his rates once, there is a possibility for the client not to pay the second time, even if those risks are reduces.
Mortgage options: bad credit home loans
If you had a mortgage before and you were not able to pay your rates, the bank probably foreclosed your property. Now, when your financial situation got better, you can think about buying a home again, but what about the negative records that you have with the credit bureau? What can you do with those? Well, there are the bad credit loans guaranteed approval that could help you to live in the house of your dreams again.
However, those credits are not in the category of bad credit loans guaranteed approval, simply because the bank is not eager to offer credits to people that lost homes before. The credit officer will estimate your capacity to get the loan, but until you bring all the required documents to the bank, you will not know for sure if you will get the credit or not.
Be aware that this credit is more expensive than a simple mortgage. The bank needs warranties, of course, such as the house itself and even some additional properties like a car, but even with those, the risk still exists, and this is why the rate for this mortgage will be bigger compared with the normal rate for such a credit or with bad credit loans guaranteed approval.
The bank will interrogate the credit bureaus, and in case they find negative records there, they will ask you about those. It is a good idea to have the justifications ready, in case you have those. For example, the fact that you were fired, or a disease that stopped you from working, are good justifications that might convince the bank not to consider the negative records with the credit bureau.
In case you don’t have those, the bank will assess your level of risk, and based on that, they will establish the rate. Read the fine print before anything else, and make sure that the clauses of the contract will not burden you into debts. All the commissions and taxes have to be stated specifically, so you will know exactly what you need to pay, and when.