Since your credit report shows delinquencies, the lender will want to make sure you’ll be able to repay the loan and that’s when the income requirement becomes important. As with traditional lenders your credit score determine whether you are approved for a loan or not, the interest rate, loan amount, etc., your income will determine whether you are approved or declined for a bad credit loan and will contribute to establish all the bad credit loan terms too.

How Income Affects Approval

In order to get approved for a bad credit loan, your income has to let you afford the monthly payments without sacrifices. Moreover, after payment, you have to have sufficient money left for unexpected expenses. That’s why the amount of the loan’s monthly payments cannot exceed certain portion of your overall income.

Though these numbers are flexible, truth is that a small income will limit your ability to get finance with or without bad credit. Since bad credit loans are more expensive, you’ll be able to get even smaller monthly payments with the consequent longer repayment programs and smaller amounts.

How Income Affects the Installment’s Amount

The loan installment’s amount cannot exceed 35% or 40% of your income without risking a loan decline. If your income is limited, you need to request longer repayment programs so as to reduce the amount of the monthly payments. This limitation is due to the fact that the lender wants to be sure you’ll be able to afford the monthly payments.

Lenders consider that expenses added up (without the loan installments computed), usually eat up 50% of your income and logic rules that at least a 10% should be left for unexpected expenses that may rise. And if nothing unforeseen happens, that extra money should be added to a savings account.

Income Problems and Solutions

Having income problems will eventually reduce your ability to get approved for a loan. If you also have bad credit, chances are that you won’t be able to get approved at all. However, there are a couple of things you can do in order to boost your chances of getting approved for the loan you seek.

First of all, you need to reduce your spending dramatically. You can call it war economy if you want but just cut any unnecessary expenses and save as much money as possible. Remember that a small income is even smaller if your expenses exceed what is expected for someone with that income level.

With the aid of a co-signer you’ll be able to get approved since both incomes will be computed towards the loan. Thus, if both incomes added up meet the necessary requirements, then you’ll get approved without hassles. Sometimes, lenders raise the income requirement a bit when two people apply for a loan. However, the difference never exceeds 20%. For example: If the income requirement for a loan is $1000 and you apply with a co-signer, the two incomes combined may have to reach $1200.

Most of us have done it at a point or another during our lives however most of us do not know that the term is called amortization. Amortization in its simplest term means paying off your loan over a period of time. Amortization is pretty general and does not just relate to home loan or mortgages. It can be used to refer to your car loan, credit card bills etc.

The process of amortization is usually determining how much you need to pay for each payment over a set period of times. It is usually calculated by the loan amount, the time period in which you have to pay back, the amount per payment and the interest rate.

An example would illustrate the above point better.

Take for example you brought a house for $150,000, you pay a deposit of $20,000. So you are left with a home loan of $130,000. Suppose you found a lender who is willing to give you the loan that is for a period of 30 years with an annual interest rate of 7%

So how much would be your monthly payment?

First we divide the principle loan amount which is $130,000 with the time period in months. That would be 30 times 12 equals 360 months. You also need to factor in the interest rate of 7%. When you add up, the monthly payment would be around $870.00.

Besides calculating the monthly payments, for amortization loans, the interest payment is first deducted and then followed by your loan. However, it does not mean that the first payment is totally used to pay interest but rather parts of it.

Taking our previous example, the monthly payment of $870.00. About $760 will be used to repay interest while the rest ($110.00) is used to pay off your principle loan amount. For each subsequent monthly payment, the amount of interest paid is reduced. Eventually after as you approached the 30-year period, your interest paid would be minimum while the majority of your monthly payment goes towards repaying the principal loan.

Quite clearly as you can see, for each new loan you take out, the early monthly payments will be used to pay off the interest with only a small portion towards repaying your loan.

As you can see, amortization is quite a complicated matter. Most people would never be able to calculate the amount of interest and the amount that goes into repaying the principal loan per month. Thankfully, there are many free amortization calculators available on the internet. You can use them to calculate your monthly payment before deciding which loan to take. Your lender will also provide you with these information when you take a amortization loan.

Aiming at helping people to overcome their urgent cash needs, cash secured loans are meant. Normally, cash secured loans work well, when people face cash crisis before their payday or some other monetary urgencies at the middle of the month.

As a synonymous to cash advance loans, paycheck loans and payday loans, cash secured loans are used to bridge the sudden monetary gap. But, the distinct part of these loans is the presence of a security. Yes, unlike other loans, these loans are secured on a postdated cheque.

Cash secured loans allow borrowers to avail the amount, ranging from ₤100-₤1000. But remember, borrowers’ monthly income is the pre-determination factor of the borrowed amount. However, these loans are short -term loans, given for one to two weeks. There is a possibility to expand the period up to one month. In such cases, borrowers may be charged some extra fees.

In order to apply for cash secured loans, borrowers have to fulfill some pre requisite criteria. These are like,

• Borrowers should be a fulltime employee

• He/She must have a regular and recurring income

• Minimum income should not be less than ₤1200

• Borrowers should be at least 18 years old.

• Having an active checking account is also included in these criteria.

Since, these loans are secured on borrowers’ property; hence, the rate of interest of cash secured loans is not so high. But one can arrange a better deal, by making some efforts. These are like, meeting various lenders, asking for their loan quotes, studying and comparing various quotes etc. One can also do these things only by clicking the mouse, as cash secured loans are available over the internet as well.

Generally, a first time borrower can borrow up to ₤500 as cash secured loans. But after paying off the amount on time, the borrower can get a chance to borrow more next time, if he requires cash secured loans again.

Now, the question is that within how many days, one can get the loan? Since these loans are provided when urgency knocks the door, hence, it does not take much time to get the loan approved. Borrowers need to spend few minutes to apply for the loans, as the application process of these loans is less time consuming and free from extra paper work. In addition, within 24 hours of application, the amount is credited to the borrowers’ account.

In this context, borrowers are advised to apply for the loans within Monday to Thursday. Since, these loans take 24 hours to be approved, thus, if one applies for the loan within this time, it will help him to get the amount on the next business day.

Let us face it—some of us have lost sleep over mounting bills, high-priced commodities, and tuition increases. You wonder when things will be okay and money would not be as tight.

Sure, you would like to face your retirement years knowing you need not work because there is enough money saved in the bank. But how can that happen? What will make it happen aside from a lotto jackpot?

For some, managing their finances for long-term achievement might be the best solution. But what about the imminent problems that need immediate solutions?

If you need an extra cash just to cover up the instant money problems, it is best that you take advantage of the personal loans.

Personal loans are loans established on a borrower’s debt, credit, and earning history. In most cases, personal loans are for personal use, hence, the term “personal loans.”

Any person can avail of a personal loan without having to worry of collaterals. Hence, it is considered as one type of unsecured loans.

Generally, people who need spot cash for a new washing machine, for instance, would most likely opt for personal loans.

In earlier times, banks are the only financial institution that provides personal loans. With the growing demand for this kind of service, additional businesses, such as the supermarkets, department stores, etc., have decided to offer personal loans.

According to some statistical reports, approximately 22.1% of the “non-mortgage installment loans” are covered by personal loans. That is already a great portion in the market, considering the stiff competition within the lending industry.

Which Is Best for You?

There are three types of personal loans to choose from. Each type has its own pros and cons, with remarkable features that will fit the consumer’s needs.

It is best that you evaluate each type of personal loan before making a decision. Take a look at the basic description on each type of personal loans, and surely, you will find one that might just be right for you.

1. Balloon loan

A balloon loan is one kind of personal loan that lies on a long-term payment basis. Upon maturity, the borrower has to pay one big fee, known as the “balloon payment.”

The main point here is that the payment of the loan is “deferred” or postponed at a later date, thereby, giving the borrower the chance to save up for the finale.

In essence, balloon loans are ideal for those who have discipline in managing their finances. Since the payments are deferred until maturity, chances are, borrowers may neglect the chance of saving for the balloon payment and end up paying more than what was needed.

2. Installment loan

This type of loan is usually paid in partial amount, otherwise known as installments.

In most cases, institutions that provide this kind of personal loans are furniture shops or department stores where they offer their products on installment basis.

This type of personal loan is ideal for those who cannot afford to buy high-priced products on single disbursement.

Normally, installment loans are arranged on a fixed and determined phase. Hence, the borrower can allocate his resources based on the kind of installments his personal loan has.

3. Single payment loan

This type of personal loan is similar to that of balloon loan since the loan payment is also deferred. The only difference is that, instead of paying portions of the loan with the bigger fee upon maturity, the whole loan is payable by the time the loan has matured.

Like balloon payment, single payment loan requires discipline enabling the borrower pay the whole loan upon maturity.

Given those facts, each type of personal loans may vary noticeably based on the kind of payment options available.

Hence, it is best that before deciding on the type of personal loan that you think will work best on you, it is imperative that you check on your finances first, know where you are financially, and determine your financial life phase.

In this way, you will be able to create a feasible time line for your personal loan, enabling you to pay off your debts as stipulated on the mode of payment for your personal loan.

Getting a loan becomes easier when you own a home. Your credibility as a borrower and the repayment capability increases when you are a homeowner. Lenders find it secured to offer loans when you are a homeowner and thus they have a special loan product in the form of secured homeowner loans which are offered only to homeowners.

Secured homeowner loans are a cheap and easy way to avail fund. Being a homeowner, you need not apply much of an effort and money. This is because usually a homeowner loan is offered in huge amount with an affordable rate of interest.

As it is a secured form of borrowing, you have to offer collateral in order to get the loan. The collateral that is kept mostly your home but you can also choose to put your car, real estate, or any other valuable property against the loan amount.

With a secured homeowner loan, you can get an amount ranging from £3000-£75,000. However you can also get a higher amount by putting a higher value collateral. The loan amount can extend up to £100,000. The repayment term is usually between 2 to 30 years. The interest rate depends upon the loan amount and repayment. But do not worry about high interest, lenders usually charge a reasonable rate while offering a secured loan.

Secured homeowner loans do not differentiate between good and bad credit holders. These loans are also offered to good credit holders as well as bad credit holders. A bad credit holder may have arrears, defaults, CCJ, bankruptcy or any other reason. They can avail secured homeowner loans easily. They will be offered a loan amount that would suit their requirements as well as repayment capabilities.

Applying for a secured homeowner loan is easy. With the expansion of internet and online services, the loan market has also made efforts to go online offer you with loans in a more convenient and easy manner. While borrowing loans online, you just have to fill an application form and submit to the lender offering secured homeowner loans. This process saves your lot of time and energy. You even do not require going out of your house; the money can be availed while just sitting at home.

Secured homeowner loans are a great opportunity for individuals owning a house. People who did not yet know the value of their home will surely realize it now.

If you are a homeowner thinking of taking a loan then you may be a little confused as to what kind of loan you should go for. It is, however, not so difficult to make it out which type of loan will suit your requirements best. In this article you find an idea of what an unsecured loan is and when or why should you go for this loan.
Technically an unsecured loan is a loan which is not backed by any collateral. Collateral is a security against which you borrow the money. In UK a home with a reasonable amount of equity is used as collateral. The property which is offered as collateral makes it sure that the lender can retrieve his money by taking possession of the collateral even if the borrower fails.
This in turn means that as a borrower you have to lose possession of your home if you fail to repay the loan taken against it. So it becomes a big risk to take loans by offering collateral. If you want to pass up this risk you should go for unsecured loans. There is no collateral attached to unsecured loans and hence no risk of losing it.
Particularly if you are not sure about your repayment ability then opting for loan without collateral is highly recommendable. Despite that you can take unsecured loans if you are in need of urgent cash. The processing of unsecured loan is much simpler than loans secured against property. So you can get your hands on the money rather quickly.
What more, taking an unsecured loan you can do away with the amount of money spent on property assessment. This gives you the chance of saving a fair amount of cash. In this way, for taking out the desired amount quickly without undertaking any risk on your property and for avoiding the property assessment cost you can go for unsecured loans.

A car is something which gives you the freedom to travel as per your wish. Whether reaching your office, or enjoying with family or just for long drives to relax your mind and soul or just to roam around with friend for enjoyment, a car serves it all. But a financial gap may come between you and your dreams of owing a car. To cover up for such financial gap a cheap secured car loan is here to help you out.

Cheap car loans are becoming popular as the best way to raise funds for buying your new car. These loans are secured loans but…. No need to worry about arrangement of collateral as the car itself act as the security for the loan amount. The lender holds the title of your collateral till the loan is paid off. But don’t forget to make repayments on time as it can cost your car. This is a case when a default is made. But the chances of such defaults are minimal as the amounts of installments are smaller as per the affordability of the borrower. Also, if something uncertain happens and you find yourself unable to make the repayment of a particular installment, you can always talk to the lender about it.

Presence of security enables the people with a bad credit score to apply for such loans. These people include CCJ’s, defaulters, IVA’s, arrears, bankrupts etc. By making timely payments for a cheap car loan, they get a chance to improve their score which will help them in future for borrowing money. You can know your credit score from credit rating agencies namely Experian, Equifax and Transunion.

Coming back to cheap car loans in UK, these loans not only supports the purchase of a new car but can use them for any other expenses on your existing car such as paintwork, engine servicing or upgrade, getting new tyres, buying accessories, music system, power windows or air bags for safety reason or any other reason. As there are large numbers of car dealers in the automobile market, you can search among them and bargain with them for discount and free accessories. Most of the car dealers also offer free car insurance so look out for that while searching.

Start your research for loan when you know what you want and for what you want it…buying more than what is required will not help you and will only increase your debt. Apply through online for a hassle free loan experience by filling a simple online application form with the selected loan quote which you can search easily through loan websites. So your car is not much far with a cheap car loans in UK.

Paying your loan back early is one of the best ways to save yourself money, but there can be hidden charges as well. If you are taking out a loan and think that you might want to pay it back early, then there are certain things you should take into consideration before signing up. Here is some advice to help you to get the most out of paying back your loan early.

Why pay back early?

Paying back your loan early might seem like an impossible target at the moment, but if you have a long-term long then it is possible you will be in a position to pay the loan back earlier than the agreed term. Paying back your loan earlier will obviously benefit you because it will reduce the amount of interest that you are paying. If you can possibly afford to pay back your loan early then you should try to do so, providing that the penalties are not too high.

Different names, same penalty

Although paying back your loan before the end of its term can be a great idea, there is a chance you will have to pay a fee in order to do so. These fees can vary in price, and also in what they are called. The same early payment fee can be called an early repayment penalty, an early redemption fee, a redemption charge or even a financial penalty. It is important to check your loan policy to see if there is a charge for paying early. If you are not sure, then contact your lender for help.

How much will it cost?

Paying back early does not carry a set penalty fee, but in general the amount is around one or two month’s interest. This means you need to work out when the best time to pay back the loan is. Usually, it is easier to pay back the loan early when you can afford to pay back the entire amount outstanding. However, you should avoid this if you are near the end of the loan term, because the charges may be as much as you save. However, some loans will allow you to pay back a certain amount early before you have to incur a charge. If you can afford to then pay back these amounts, as you will not get charged.

Flexible loans

If you really think you will want to pay back your loan early, then you might want to think about getting a flexible loan. These loans have higher interest rates, but they allow you overpay. This means you can pay back your loan much more quickly when you can afford it without having to incur any penalty charges. However, you should only consider one of these loans if you are really serious about paying the loan back early due to the higher interest rates.