When you try to borrow money from a bank, one of the first time is to ensure that your credit report is accurate because your FICO score will have a big say on the types of personal loans available to you and at what rate. If you find that having a bad borrowing history is preventing you from getting a $5000 unsecured personal loan, find out what are the advantages with using collateral to get a secured installment personal loan.
For people who are able to offer collateral, one of the biggest advantage is that their loans are more likely to go through even though they may have bad credit or even when unemployed. With a 5000 dollar secured personal loan that you can borrow with bad FICO, you are using an asset to secure the loan, which provides lenders better assurance and protection against bad debt arising from delinquent accounts. Unlike a cash advance on your signature, borrowers do not always need to have an excellent credit report or having to provide verifiable income to meet the underwriting requirements for a low interest personal loan from banks or financial institutions. While lenders are likely to check your borrowing/payments history, it is not as crucial as a sole determinant anymore.
The collateral, which can be a car or a home has to be under your name and these assets will need to be appraised for their value in the current market and although you can get them appraised yourself by a qualified evaluator, your lender will definitely have their own team of experts to determine the worth of your assets that are be to placed as collateral.
In such an agreement, the amount of money you want to borrow will largely depend on the type of assets used. Common sense tells us that you should not attempt to borrow 10000 dollars today with a beat up truck and neither should you use your home to get a small personal loan because with secured financing, you risk losing ownership of your house if you default on your loan obligations.
If you want to get a secured loan with bad credit, you should first decide how much money you intend to borrow. Because unsecured signature loans often have capped limits, they may not be the solution if you want to borrow 5000 now, given the fact that your bad credit will likely make it difficult to get an approval from the lenders. At the same time, you should decide if putting your assets at risk is worth it in exchanging for 5000 dollar installment loans with lower fees. As a guideline, the amount of cash you want should somehow be proportional to the value of the asset that is going to be held as collateral.
When you have a poor credit record, it will seriously undermine you when searching for long term personal loans so improving your FICO score should be your top priority.