Subprime Card Offers Loans for Poor Credit

New type of credit card offers access to loans for poor credit customers:

If you’ve got a credit score below 600, chances are you’ve messed up. Late payments. Foreclosure. Maybe you’ve been through a bankruptcy.

Getting a credit card in these situations can be pretty difficult, for obvious reasons: It’s not worth the risk to many lending institutions.

But Americans with bad credit are often the ones that need loans the most. In the absence of reasonably priced lending, many resort to alternatives with exorbitant interest rates to stay afloat, like payday loans — an industry that has grown massively over the past decade or so.

Sometimes this works as an expensive stop gap, but often people get sucked into a cycle of debt and struggle to come back up for air.

Marla Blow thinks she can help. A card industry veteran who spent nearly a decade at Capital One and helped run the credit card and payments division at the Consumer Financial Protection Bureau, Blow recently helped launch a startup called FS Card, whose sole product at the moment is a credit card targeted toward those with tarnished credit histories.

The card, which is called “Build” and has MasterCard branding, enables customers to avoid the local payday lender’s sky-high rates and gradually mend their standing in the eyes of the almighty FICO.

FS Card’s strategy is to target “deep subprime customers” in the 550 to 600 credit score range, a group that’s largely been overlooked and forgotten by the big banks, according to Blow, the company’s CEO. By offering transparent rates and fees and low spending limits to start, Blow thinks she can carve out a profitable business that also helps people repair their financial bedrock.

It’s off to a good start: Some 50,000 people have signed on in about a year and a half.

“We’ve found really good traction,” Blow told Business Insider. “Access to mainstream, reasonably priced credit is still something the underserved market is very much seeking.”

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Explaining No Credit Check Loans

No credit check loans may seem like a dream come true for those with bad credit. However, no credit check loans are quite different than one may think. A no credit check loan is not a loan you can get to buy a car or a house.

No credit check finance have two main features. They are for small amounts, usually under 1,000 dollars, and they are for a short period of time, usually two weeks.

No credit check loans are often called payday loans or check advance loans. They are meant to be used in an emergency and not as extra money. These loans are a secured loan that is secured with a check in the amount of the loan plus fees.

Fees for such loans are usually much higher then typical loans because they are not going to be carried for a long time. An example of how much these loans can cost is for a 500 dollar loan the typical rate of interest would cost a borrower 75 dollars.

This large amount is charged because people often default on this type of loan and due to the fact that credit is not checked…

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Benefits of Unsecured Loans for Business

In this economy, there are lots of things being said about the risks that come with unsecured loans. What about the benefits? In difficult financial times, businesses that are starting out need seed money while established businesses need money to stay open. There is always a risk involved in borrowing money. But, with the right planning, you can keep risks minimal. Here are several benefits that you can get from unsecured business loans.
The Benefits of Unsecured Business Loans Exposed

Look at both sides of the unsecured business loan equation when you are about to make a decision. The benefits you will read about below will help you figure out if the benefits do outweigh the risks.

First, you do not need to put up any collateral. A line of credit or a loan that is unsecured will give you funds you need without having to pledge a piece of property or a car. Other assets also remain unencumbered. There is no need to insure your obligation with anything. It gives you a great way to improve credit without risking the loss of any property if you default.

Second, you can use it as a reusable source of funding. Most loans are issued like credit cards. You get a certain limit and, as long as the balance gets paid every month, the credit can be reused. The limits are usually smaller than loans that are secured in order to reduce risk to the lender but, if the borrower meets additional loan terms, they can be negotiable. This option will eliminate the problems with traditional loans or cash advances. Businesses do not have to reapply for more money.

Third, these unsecured business loans are open-ended. They do not run on terms and do not have pre-set end dates like secured loans. You have to meet certain guidelines to get approved. But, as long as you make your payments on time you will enjoy the freedom they provide you. You get the money you need when you need it.

So many borrowers make the mistake of thinking that defaults do not apply to unsecured loans. While these loans are collateral-free, lenders do have a right to recoup on any default amounts. If you do default they may pursue legal action or place a lien on your property. Avoid this by always making payments right away and working with the lender if you find it hard to make timely payments.

Fourth, financing is unrestricted. Lenders of these funds leave the spending up to you as long as you use the money for business expenses. These loans do have risks involved. You just need to ask yourself if these risks are worth it to have renewable funding at your disposal.

If these resources can help you during slow periods, they could be worthwhile. With proper planning and responsible use, these unsecured loans can take your business from its dreams to its reality of being profitable. No matter what your business goals are, you can use this information to make a decision about your finances that is right for you.


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Card Advances Worst Form of Cash Loans for Bad Credit

The NY Times decries cash loans for bad credit that involve cash advances from a Visa or Mastercard account:

Everyone hits an unexpected bill or expense now and then — a car breaks down, an air-conditioner fails during a heat wave, a relative needs medical care.

While it may be tempting, one source of emergency cash that should be used sparingly, financial advisers say, is a credit-card cash advance, which is an expensive way to borrow money.

“Cash advances are almost always a bad idea,” said Michael Sullivan, a personal financial consultant in Phoenix with Take Charge America, a nonprofit credit counseling agency.

The average interest rate for a cash advance on a credit card is nearly 24 percent, compared with an average of about 16 percent for purchases, according to a new analysis by the card comparison site.

Unlike with purchases, cash advances have no grace period: Interest starts accruing right away, as soon as you borrow the money…


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The Online Loans Bad Credit People Need

From an article describing direct online loans bad credit applicants may consider when in financial distress:

When asked to think about financial assistance, most people will envision walking into the bank and asking a financial advisor for a loan. While many of these institutions offer critical help to millions of Americans, they don’t provide it to every individual that walks through their door. They review applications according to strict rules and regulations, many of which restrict those with poor credit from applying. This process takes time to complete as you meet with advisors and submit supporting documents that are shared with other institutions. In some cases — like when you’re facing down an impending due date — you simply don’t have the time to wait.

Direct Lenders Are A Refreshing Alternative

Direct lenders have streamlined their rules and regulations to help those typically overlooked by conventional lenders. They still review you application carefully, but they don’t necessarily use subprime credit scores to reject your application. If you speak with the representatives at MoneyKey, they’ll you know what you need to provide. These reps may review your rating through other channels, but it’s not the only way they’ll determine your candidacy. It’s just one number amongst many factors they use to review your application…

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Vital Information About Debt Consolidation Loans

Getting yourself into debt is a very common and can happen to anyone that is not one hundred percent careful with their finances. With all of your monthly obligations to take into consideration such as food, water and living situation, it may seem near impossible to come up with the money to repay your debts, especially if you have a family. Debt consolidation loans have many options available for people in debt situations that can truly save them from bankruptcy and other bad credit situations.

You can get a debt consolidation loan from many sources these days. You might even have some lenders fighting over your business if you play your cards right. You can typically find banks offering lower interest rates and better repayment terms than independent lenders. Your applications to banks and other lenders should be done in greater numbers physically, as you have more chances to get a loan if you do…

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