Loans for People With Poor Credit-avail Cash in Tough Times

By: Jennifer Morva
Getting a loan has become an easy task. What with so many banks offering loans for automobiles, housing, education and other such basic necessities, people are at ease and can think of buying the pleasures of life. Banks check the financial status, assets past record of the borrower based on which loans are given. These criteria are very necessary for the banks and give them an idea about the borrower. There are people with poor credit too, who are not financially well off and might not be able to return the loan or cause delay in repayment.

For people with poor credit the bank rules differ in terms of repayment, documentation and interest rates. These differences serve the interests of the lender so that he can stay in peace and not worry much about the repayment. The interest rate and other factors for the loans for people with poor credit varies between 7.4% and 27.6%. Again it is necessary to have some type of security for people with poor credit. So banks have devised two types of loans for such people so that they can live in peace about repayment. One is the secured loan where some asset, property of the borrower is mortgaged which equals the value of the loan. In this case the lender can at any time sell the mortgaged property to get the loan money in case the repayment is not done in time. Second type of loan is the unsecured loan. In this type of loan no asset or property is mortgaged but the interest rates are very high.

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