Finding a loan for people with bad credit is not impossible it is true that one of the most important criteria for getting a good loan is having a stellar credit record. This is why most people who have bad credit foreclosure loans often find themselves facing rejection when applying for a loan.
Although most conventional lenders do hesitate to grant loans to individuals with less than perfect credit records, with a little bit of effort, it is possible to find companies who will gladly consider a loan for people with bad credit or in foreclosure.
Applying for a loan in foreclosure
If you have ever been foreclosed upon, there is a high probability that you also have a record of bankruptcy on your permanent files. With this thorn on your side, it can really be hard to find companies that are willing to lend you money. However, there are a few lending institutions that do specialize in giving bad credit foreclosure loans to people like you.
You do have to realize that if you have these foreclosures and bankruptcies on your file, you cannot expect to be given low interest rates or small down payment requirements. You should also look a little further than the traditional lending companies if you want to be approved for a loan despite your bad credit standing.
There is a significant difference in the length of your waiting period depending on whether you have a foreclosure or a bankruptcy on your record. If you have filed for bankruptcy, you may be rejected for loan applications for as long as a few years whereas if you have only been through foreclosure proceedings, you may be able to get a loan as soon as six months later.
Several factors are considered in order to determine the actual time when you can apply for a loan. If your home was sold soon after the foreclosure, allowing the lender to recover most of your outstanding balance quickly, you might be able to apply for a loan at an earlier time to a company willing to consider a loan for people with bad credit.
The truth is that there is really no way of knowing what will happen in terms of waiting periods until the foreclosure proceedings have been completed. However, you can expect to be able to purchase a new home in about two years because by this time, the FHA will already allow you to file for a new housing loan.
Where can you find a loan for people with bad credit?
There are certain types of loans that you may have a hard time getting approved for if you have a foreclosure or a bankruptcy on your record. The one thing you will not have to worry about is finding a new credit card.
Many credit card companies will be quite comfortable approving your application because they know that you are not eligible to file for bankruptcy for another seven years and will therefore be obligated to pay all your credit card bills during this period.
If you combine this with the high interest rates, it is easy to see that credit card companies stand to earn a lot more from people like you. As you can see, it is not impossible to find a loan for people with bad credit.