Many have been affected by the side effects of the recent economic crisis including Paul (not his real name), who is in his late 20’s and has been working his fingers to the bone ever since. He started his small business after he was retrenched during the economic recession. At the same time, he had to bear his financial priorities such as paying off his credit cards and student loans, as well as saving for his children’s education. It is common that Paul was stricken by the inability to perform his financial duties due to his non-stable income. He could barely save enough money to feed himself (and the whole family).
When things got worse – for instance, a sudden drop of sales or profit, it would also affect his daily expenses. He had once considered having an early withdrawal of his 401(k) when he felt behind paying all his bills but in the end, he sought a bad credit personal loan to cover his daily expenses – here’s how he did it:
1. He started to think realistically– Paul had a low FICO score, which is lower than 660, and it is extremely difficult to get personal loans from traditional and private lenders. Not all lenders are willing to accept any loan application without collateral. At the beginning, Paul was reluctant to accept the fact that the private lenders rejected his loan application because of his low credit score. He even applied for personal loan from LendingClub.com, but to no avail.
2. He began to search for bad credit co-signer loan deals– Since Paul had realized his financial status, he began to compile as much information about getting co-signer personal loans from accredited private lenders from TheFinanceForums.com – an internet personal finance forum which you can look for forum users reciprocate to other forum users’ problems. Fortunately, Paul’s dad was willing to become Paul’s co-signer as he has an excellent credit record, and a few valuable stocks on hand – which it can be used as collateral. In this case, you will be granted a financial assistance by a lender without checking on your current credit score.
3. Find a personal loan with fix rate and term– As you know that the interest of such loan is not tax deductible, it is important to find a loan package with the lowest cost. Avoid getting such loan that works as a revolving line of credit in which its interest rate is changeable. Thus, Paul is tend to be more determined if he chooses a loan product which has fix rate and term, which he can pay off your loan consistently within a certain period.
4. Reject personal loan which has interest rate higher than credit card rates – Paul chose the right loan deal, mainly based on its low interest rate. He knew that it was not worth his money to obtain loans which have higher interest rate than credit card rates.
If you are experiencing the same situation as Paul had, hope that you can gain insight from his experience. Stay determined to find the right personal loan to cover your daily expenses.