4 Point How-to Guide: Making Good Use of Bad Credit Loans
With more than 72% of Canadians in debt, there are many individuals with bad credit due to a variety of reasons. Though bad credit will usually keep you from taking out other loans or receiving certain financial grace, there are lenders out there that are willing to turn a blind eye to your poor credit report. Car title loans are often included in this bad credit loans category. Even if you find yourself in an emergency, for the sake of your financial future, make sure to follow a few steps before applying for more loans. You want to be able to slowly work your way out of debt, not create a bigger hole.
A How to Guide: Making Good Use of Bad Credit Loans
- Read the Fine Print You will need to own your own vehicle in order to qualify for a car title loan. Ask questions when you receive the terms and conditions of your bad credit loan. Make sure you clearly understand the entire contract. Do some online research about car title loans before going in, so that no one can take advantage of you. Pay special attention to the interest rates and the repayment schedule. Avoid contracts that include a balloon payment. This gives you low monthly payments in the beginning, but then they grow larger toward the end of the loan. This kind of repayment plan starts out comfortably for you, but by the end you may find yourself in financial difficulty again because of the growing payments, plus interest and fees.
- Have a Repayment Plan Ready If you are taking out a loan without knowing how you will pay it back, chances are the loan will only be temporary relief for your financial crisis. You need to think ahead and consider how you will be able to pay this loan off in full as well as what kind of monthly payments you can actually afford. You can develop a repayment plan on your own or with your lender. Even if you are facing a financial emergency, you will want to think through this step thoroughly before applying for a car title loan or a bad credit loan of any kind.
- Repay on Time or Early If you are a forgetful person, sign up for automated payments so that you don’t forget to pay each month. Late payment penalties are the last thing you need when you are already in debt. If you find yourself with a little extra money at the end of the month, don’t spend it. Put it towards your loans and you will be that much closer to financial freedom. If you can, pay off your loan early. Avoid companies or contracts that penalize you for early repayment.
- Choose a Reputable Company Bad credit loans are available from a variety of companies. Before you even ask if you qualify, research and review the company you choose and make sure they have a good reputation. If anything sounds too good to be true, ask questions and find out all the details. You will want to make sure that they will treat your personal information as confidential. Find out if the company is signed up with the Better Business Bureau. Visit their website and learn more about them. If you take the time to do your homework, your bad credit loans will not become a burden.
If you’d like to work with a reputable lender that can help you put your bad credit loan to good use, contact Get Loan Approved today to see if you could qualify for one of our car title loans!