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High Risk Loans
High Risk Loans

High Risk Loans - What Are They?

Is your credit history littered with late payments, underpayments, or no payments? Have you defaulted on a loan? Is there a bankruptcy hidden in your past? Has your home gone into foreclosure? Do you have problems holding down a job? Would you loan money to somebody like you?

If you answered yes to more 

High Risk Loans - What Are They?

(Continued) than one of the above questions (with the exception of the last one), then you have bad credit. Loaning money to you is going to be in the high risk category. Financial lenders are not going to court you in an effort to obtain your business. Nor are they going to tap dance around your qualifications, or lack of them, the terms of the loan, or the simple fact that it is going to cost you a pretty penny to borrow money with a credit track record like yours.

Financial lenders take on a large risk when they loan money to individuals who have a bad credit rating. Let's face it, anyone with bad credit is not exactly a stellar or model consumer. After all, you have already proven that you can't be trusted with money. Therefore, the only kind of loan that you will be able to get is a high risk loan with high cost features.

In fact, bad credit usually does not happen overnight. In some cases, it's a process that may take months or even years to develop. If you managed to get yourself into a financial bind that's so bad, friends and family run the other way when they see you coming, be grateful that the world of finance does include lenders who are willing to take the risk and loan you money, even if it is at a higher cost.

Why should a lender take a chance on someone with bad credit? The risk is greater that the loan won't be repaid or that it won't be repaid in full. In fact, loaning money to someone who has proven that they have a problem paying their bills on time or even simply paying them at all is definitely going to be a large risk for a loan of any size.

Fortunately, for you, lenders are out there who will loan you money, but who will also charge you premium rates for it. The interest rates charged to an individual with a proven history of bad credit are going to be high. High enough, in fact, that the lender can rest easy about loaning the money.

As you can see, loans for people with bad credit are available. Typically, sub-prime lenders specialize in providing high risk loans to the individuals who need them. Shop around and locate a sub-prime lender rather than a conventional lender if you are in need of a high risk loan. The cost may be higher for you than the cost for someone with good credit, but that is because consumers with bad credit are a high risk for any financial lender. So, don't expect to be treated with kid gloves.

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