The right lender can make a difference between securing a great deal on a loan and not. This is especially true if you have a credit score below 650 due to unpaid debts or a poor credit history.
A huge chunk of people applying for loans today fall under the subprime category. That said, it would not be difficult to find a lender who could assist you with a mortgage or car loan, though you may have less-than-stellar credit.
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To avoid being overwhelmed by all the options presented to you, here are four useful tips for finding the financial institution that’s a perfect fit.
List your requirements
Jot down what matters to you when it comes to choosing a lender. Factors like location, number of years in business, and accreditations with federal agencies all have an impact on how well your relationship with a specific bank or private lender will work out. Remember, you are looking for a financial institution that will genuinely take your needs into consideration. It’s important to find one you feel comfortable with, based on track record.
Do your research
Access to the web comes in real handy with this one. Start with a standard search engine query for subprime lenders in your area. You can then narrow these down based on the personal requirements you’ve written down in Step 1.
Seek and compare
Once you’re down to about three or four options, get in touch with each one via phone or visit their offices in person. Discuss your needs with the loan officer and get a proposal for a subprime loan. Scrutinize each of the proposals you get closely, paying careful attention to fees. You’ll want to have the option to refinance your mortgage at a later time. Excessive prepayment fees could mean being locked in that subprime loan longer than you want to.
Do a character assessment
Observe how a lender talks to you about the loan. Is he encouraging you to borrow more with the promise of low interest rates? This is a red flag, an indication that the lender might be after the profit he can make off of your loan than anything else.
Let us connect you with reputable and established lending institutions in your locale.