Getting a $4000 installment loan for high risk borrowers means having to accept higher interest rates, and harsher terms and conditions. Established banks are not likely to approve unsecured loans for people with poor credit scores below 650. That means if you have not been careful with your money and savings, you may find it tough to get cheap loans when you needed it.
Your FICO credit score is computed from the records of your current financial commitments and borrowing/payment habits. It shows a summary of how you will handle your loan payments based on your previous and existing debts. Private money lenders may reject you based on your computed creditworthiness or the FICO score. If you already carry heavy debts and it appears that your income is already barely sufficient to support the repayments, you can only try the high risk money lenders willing to provide short term loans.
The best way to avoid relying on yet another $4000 loan for an emergency with is simply to improve your credit scores. Start by making sure you do not add on more new debts. If your income is sufficient to pay all your loan installments on time, make sure you live frugally for the next few months and put aside all surplus earnings in the bank. At this stage, you do not need to try and pay more than necessary than the minimum payment required by your creditors. However, it is most important to quickly build up sufficient cash savings in your bank account, preferably at least 6 months of your normal pay. These savings will help you out whenever you do not have sufficient cash leftover from your paycheck to foot the loan installments.
This is the recommended level of liquidity savings as advocated by many financial planners. When you have sufficient savings, you will be able to avoid getting personal loans for poor credit. Note that while putting aside money, you still need to punctually pay all your creditors on time. This will ensure no more new negative remarks will be left on your personal credit history and you will be able to restore your FICO score to above 700 levels eventually. Any delays in your monthly repayments will mean that all your efforts on credit repair will be affected. The longer you wait, the harder it is to get a personal loan on favorable terms.
Before you get your credit and savings up to reasonable levels, you still need to rely on high risk loans for cash tight situations if you have any sudden large expenses. Some loan brokers can find unsecured short term loans for such borrowers, and it is becoming the largest growing business opportunity in the private loans industry. Because the risk of loan defaults are higher compared to people with above 700 FICO scores, legitimate lenders will place a smaller loan limit on such lending. The interest rate will also be comparatively higher, but it should still make economical sense to use these loans than to face the consequences of your cash flow emergencies.
Some finance companies are willing to take some carefully calculated risk by issuing secured loans for people with bad credit instead. This means you must be able to provide some high value collateral such as your house, car or land etc in order to get the money but if you are not able to repay the monthly installments, they can have a legal claim to your collateral used to secure the loan approval.
If you are willing to put your assets up as loan security, then the effects of your bad credit are somehow lessened when it comes to getting personal loans. The lenders are less worried about getting their loan principal back in the event that you default on the payments. In this case, it should be the borrowers that are worried about losing their assets if they are late in repaying the monthly loan installments. Anyway, you can often get a higher loan sum, lowered rates of interest and other favorable terms with a secured personal loan. If you are not confident of managing the new monthly loan payments, you can also ask for a longer loan tenure which is usually approved. Note that although this lowers the money you need to put together every month, the banks do earn more interest fees out of you in total.
These unsecured loans are designed for tenants or for home owners that prefer not to put down their homes as loan collateral. In that case, guaranteed legit unsecured loans have higher interest rates and can only borrow up to $4,000 provided you have good FICO. Money lenders are more stringent in processing big cash loans, although there are still ways to ensure unsecured personal loans for poor credit during emergencies.
In fact it is so easy to access these that they are also known as instant decision loans and you can even do it online yourself. These money lenders do not require any form of collateral such as home deeds or car titles. That is why legitimate lenders can process your requests and transfer the money to your checking account securely. The catch however for no hidden fee loans for poor credit are the very high interest rates you must bear with. For example, the interest compounding is very fast and that makes these rather high risk personal loans.
Actually, it may be better to fix your money problems at the root. You should realize any personal finance management problems such as lack of savings or overspending that cause too much loans, debts, credit card bills that take up all your monthly income. Too make things worse, some people are affected by long periods of unemployment and loss of income. The rate of interest and conditions on 4000 dollar loans you pay monthly should be a wakeup for you to start a regular savings plan.