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Subprime Personal Loan

One of the best personal loans that a person can get is a subprime personal loan. A subprime personal loan is a loan in which interest rate charged is below the prime rate.

The prime rate is the amount of interest charged by large commercial banks. It is based on the rate banks pay when they borrow money from the Federal Reserve.

The advantage to a subprime prime personal loan is obvious: the interest rate and the cost of the loan will be substantially lower than that charged on other loans. A persona can save a small fortune by getting a subprime personal loan.

Where to Get a Subprime Personal Loan

Finding a subprime loan can be very difficult because most personal loan lenders specialize in making direct cash loans at high interest rate. Lenders are very reluctant to make subprime personal loans because they are very risky.

The only subprime personal loan most borrowers will be able to get is a home or real estate equity loan. An equity loan is a loan based on the amount of equity in a piece of reality. Equity is the difference between the amount a home is mortgaged for and the value of the home. If a home is worth $150,000 and mortgaged for $50,000 the owner has $100,000 in equity available.

Only borrowers with very good credit will be able to get a subprime rate on a home equity loan.
Borrowers with bad credit may have to pay a much higher interest rate on equity loans.

Other Subprime Personal Loans 

There are other sources of subprime personal loans available to borrowers. A very good source of subprime personal loans is friends and relatives. Individuals are able to do this because they can set the interest rate on money they loan.

Hard money and cash lenders, especially those that lend money online may also be able to make subprime personal loans. These lenders might loan money at a lower rate if a person borrows a large amount of money or has a good history of loan repayment they might be able to negotiate with a lender for a subprime personal loan.

Another way to get a subprime personal loan would be to put up some item as collateral. A person might be able to get a subprime loan if they put up a very valuable item as collateral.

Searching for a Subprime Personal Loan

Most borrowers will not be able to get subprime personal loans because of their credit history. Still every borrower should search for such a loan.

Even if you can not find a subprime personal loan you might be able to locate a loan with a much lower interest rate. Even if a person can only get an interest rate at the prime rate they could still save hundreds or thousands of dollars in interest on a personal loan.

Getting a lower interest rate on a personal loan will always save you money. Therefore you should always try to get a subprime personal loan.