For over 40% of Americans, Sub-Prime is a term that is very familiar. With the recent crash of the sub prime home loan market there are increasing numbers of individuals in need of loans. Unfortunately for these people loans are harder and harder to come by. What can you do? Fortunately there are still a lot of companies out there willing to help sub prime loan individuals. Banks will still go out on a limb to help you but not as readily.
In order to make you more appealing to lenders, start trying different methods to increase your credit score as much as possible. Debt Consolidation helps a lot. Debt consolidation companies take all your outstanding credit card debts and make the manageable. They negotiate with your credit cards to lower your interest rates and let you pay them directly to settle your debts eventually.
I say eventually because even though it's at a reduced rate you still are going to be paying this for a while. What it does for your credit however is show timely payments on a regular basis. This will help your credit a lot while maybe not instantly getting you ?good? credit; it will send you on your way to better possibilities.
Sub prime loans are a huge industry and there are hundreds of banks waiting for you to ask for a loan. Just be careful! Make sure you read all of the fine print so you know you can handle any APR they give you. If you have already filed for a bankruptcy you know you cannot file again for 7 years so you need to be extra careful about how you take out loans and manage your debt.
While home loans may be near impossible to get for sub prime at the moment. Auto loans are much more easily obtained. While you can expect to pay a lot more in APR than a typical borrower, you can find manageable rates with dozens of companies who are in business for the sole purpose of making an auto loan happen for sub prime borrowers.
A simple search on google can turn up hundreds of such sites. You can expect a free loan application that requires basic information such as name, address, income, and social security number. What most people don't realize is that these companies usually aren't the direct lender. They actually just match you up with an auto dealer in your area that specializes in bad credit auto loans. The dealer will then call you from the application and they will attempt to get you an auto loan through their bank relationships.
The good news is that they have special lending institutions that they partner with specially geared towards sub prime customers, so you can be 99% sure you will get approved and have a pretty good looking vehicle to drive home in.
Never get too discouraged over your credit score, always remember, many people have done a lot more with a lot less. You are the master of your destiny, only you can make your dreams come true. You are not a credit score!
The mortgage market is broken into two segments: prime borrowers and sub prime borrowers. Borrowers with good credit scores and a small amount of debt that is kept current are considered prime borrowers and they therefore qualify for better rates. There is no exact definition of what a sub prime borrower is, but in general, it is a borrower with lower credit score and high debt and late payments. As a general rule, a credit score of under 660, with a debt to equity ratio of over 50% and two or more late payments in the last year, will designate a sub prime mortgage candidate. If a borrower has had a foreclosure already, or a bankruptcy in the last five years, he will be considered sub prime even if his credit is now good Since the interest rates that lenders charge is based, among other factors, on the risk that the loan carries, sub prime borrowers pay a higher rate of interest. In recent years, the combination of falling home prices and rising interest rates have forced many of these sub prime mortgages into foreclosure, and so banks have become more strict than ever. If a borrower wants to improve his chances, the first thing he should do is try to improve his credit rating. By paying bills on time and reducing debt, the borrower will be able to show the lender good recent activity. He should also make sure to maintain good records and be able to document all of his recent ?good? credit practices. If, however, the borrower is attempting to re-finance a home that has a mortgage that is higher than the value of the home, it is unlikely any lender will be willing to take it as collateral. The first thing anyone in this situation should to is make an appointment with an experienced mortgage consultant. These brokers work with many more contacts, and a lot of differentalternate solutions that he is aware of to assist the borrower. The other side is that an experienced, reputable broker will not string a client along-he will advise him if the situation is hopeless. There are brokers who will accept an application fee even though the bulk of the information tells them that a home loan is impossible, so beware.
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