Most, not to say all lenders, want to make sure they get their money back and this is done through a security. In other words, they want to have a way of making cash fast on something that is yours. This is only natural and a lender who doesn’t do that is an idiot, a philanthropist or probably a close relative of yours, which is not the case here.
What Gets You A Better Deal?
Well, the best possible scenario is when you are a homeowner and the property is not mortgaged. Even better still, is the fact that your property is insured. Personal loans are special, in the way of not needing to inform the use you will give to the money, once it is in your hands. Nevertheless, it is useful to inform what you will do with the loan, when it can mean a further security.
For example, adding a room to your house as the family gets bigger, can be taken as a sign of stability, being definitively settled in the area you live in and responsibility towards the welfare of your family group.
Other assets can be taken as securities, like your car, trailer or something valuable. These cases, of course will cost you a higher APR, or Annual Percentage Rate, but are still interesting in the way that it isn’t necessary for you to provide a co-debtor, that is someone who will respond to your debts in case you fail to do so.
So, What Makes A Lousy Deal?
First off, the wrong choice. I mean, the first lender that comes into your sight, or even a “wise guy” wanting to take advantage of your bad credit. Bad credit is just that: Bad credit. Don’t feel overwhelmed by it and know that you deserve good treatment, whatever your credit. Another thing that makes the deal a lousy one is when your home is mortgaged and your car is still “pinned” as a security for your car loan.
Probably, if the debt is near the end, you may want to get a small unsecured loan to pay off the car loan and use the car as security for the personal loan. The same thing applies to the mortgage on your house. Of course, you must take into account the addition of payments due every month, so as not to incur in unnecessary financial harassment to your family.
One Last Point
Always find out what the normal bank interest rate is, for a deposit of approximately the same amount of the loan you are looking for. Then calculate a healthy profit for the lender, but consider that it should never exceed the APR charged by credit cards companies. Otherwise you’ll be on the chopping block in no time. If you are not given the APR directly, ask for a quote and then calculate the interest rate yourself, with a few numbers on paper, or a simple calculator.
Research, investigate, find out, without even leaving your home. Surely you’ll find a good option on the Internet. There is always a right one for you, if you take the time.