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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.”
Oh really? Well, is it worth a savings of $150,000 or more? Granted you may not
be looking for a $100,000 loan. But even if you want to borrow only $10,000 or
so, the better rates you’ll enjoy with good credit will still save you several
thousand dollars.
2. “Fixing my credit will take too long, or it just isn’t possible.”
It’s often possible to make very a significant improvement in your credit rating
in just a few months, and in some cases as little as 30 days.
3. “I don’t know how to repair my credit and can’t afford to hire a credit
repair agency”
For a fraction of the cost of a professional agency, you can purchase a good
book on credit repair that will walk you through the whole process.
4. “Do-it-yourself credit repair is too difficult” or “I don’t think I can
repair my own credit”
Don’t be intimidated by the idea of fixing your own credit. If you can write a
few letters, address, stamp, and mail them you can repair your own credit.
Your decision comes down to this; you have two choices.
1. You can spend some time (maybe a LOT of time) shopping for a bad credit loan
with the lowest possible rate, and still end up paying thousands (even tens of
thousands) more in interest.
2. You can spend some time fixing your credit and spend those thousands on your
family’s needs, instead of paying them to your lender.
Do you really think your lender needs your hard earned money more than you and
your family need it? Anybody can work on fixing their own credit. That’s right,
anybody!
Get a good book on credit repair and get started TODAY!
(c) 2005 eBusiness Power
About the Author:
Jim Eastman is the support contact for http://www.ErasingBadCredit.com and http://www.CreditRepairBiz.com. People looking to repair their credit can sign
up for a free mini-course on credit repair by visiting http://www.ErasingBadCredit.com
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