Large Loan With Bad Credit

It’s very easy for almost anybody with bad credit to get a small, but it can be very hard to get a large loan with bad credit.

There are lenders who make large loans to people bad credit but they are often hard to find, especially for average people without connections. Fortunately, it’s easier to find such lenders and apply for loans with them today than ever before.

Most people should be able to locate lenders who make large loans to those with bad credit by going online.

Hard money loans 

One of the most common types of large loans made to people with bad credit is a hard money loan. Hard money lenders base their lending decisions on the amount of money that a person has rather than credit worthiness or credit scores.

To get a hard money loan a person usually has to demonstrate that they will have the cash flow to pay it back. Hard money lenders usually demand proof of income in the form of bank statements, pay stubs or in the case of businesses, sales receipts. One drawback is that hard money lenders usually only lend to businesses and not individuals.

Secured loans

One of the best ways for individuals with bad credit to borrow large amounts of money is to take out a secured loan. In a secured loan, the borrower puts up a piece of property such as a car as collateral for the loan. If the borrower doesn’t pay off the loan, the lender simply takes possession of the collateral. Since collateral is involved, the lender can afford to take the risk of making a loan to person with bad credit.

Secured lenders such as pawn shops maybe willing to make large loans if a high value item such as a car, jewelry, a boat or a piece of equipment is put up collateral. The amount of the loan will be less than the value of the item. Locating a secured lender capable of making large loans can be difficult but it’s not impossible.

Real estate equity loans

Another kind of secured loan made to people who have bad credit scores but own real estate can get is an equity loan. Equity loans are loans in which the real estate is used as collateral; in effect an equity loan is a mortgage.

Generally, the amount of an equity loan is based up on the amount of equity a person has in the real estate. Equity is the value of the property above the amount it is mortgaged for. If the value of the home is more than the amount of the mortgage, the owner can take out an equity loan.

A drawback to equity loans is that they increase the amount of mortgage payments that a person has to make. Another drawback is that persons with bad credit often end up paying higher interest on equity loans.

Business loans

Business owners who need a large loan but have bad credit have other options. A very popular kind of loan many businesses get is an accounts receivable loan. This is a secured loan in which unpaid bills or invoices are used as collateral for a secured loan.

Large loans

There are many options available for those with bad credit who want to borrow large amounts of money.  Most of these loan options will involve stricter terms and higher interest rates.