A common question for people is why am I being denied for a small loan? One of the most common reasons for a lender to deny a small loan is because the applicant’s credit score does not meet the lender’s minimum standard. If you have late payments on your credit report, accounts in collection, or if you have filed bankruptcy, it can severely affect chances of receiving a loan of any kind.
Reasons for Personal Loan Denial
One has to monitor his or her credit score; it is not anyone’s responsibility but your own to know and improve your credit score. To be approved for future unsecured, small, loans, one has to pay his or her bills. In some situations, information is falsely reported, and if you are unaware of information that is not your own on your credit score, it can negatively impact your chances of receiving financing. It can take years to remove negative aspects to one’s credit, so the sooner one takes the initiative to monitor and improve his or her credit report the better off he or she will be.
Need a Loan after Being Refused Everywhere
To receive a loan, you must understand how loans work.
Unsecured Loans vs Secured Loans: Many people do not know the difference between a secured loan and an unsecured loan. An unsecured loan is a loan where one’s income is the most important factor, and ways that one proves his or her income is with a down payment and proof of income. In short, one’s money he or she has on hand and his or her projections for future earnings determine if one is qualified to receive an unsecured loan. Secured Loans use assets to qualify for loans. Auto title loans or car title loans are an example of secured loans—taking out a loan against an asset, such as a car’s title, to secure a loan. Now, assets can be liquid, or they can appraised verifiable property: objects which have a worth equal to a verifiable amount of liquid capital and have the probable potential to increase in value over time.
Cons of Unsecured Loans: Unsecured loans have the potential to leave one with a huge amount of debt. Use student loans for example; if one does not have any collateral to take out a $150,000 loan, it will take years to pay back the loan. And, usually, cash is acquired through a job: meaning one will never see the full value or benefit of their payroll check, for debts that have been accrued have to or will be deducted from his or her check. The time that one is indebted is long-lasting, and because of the length of time it takes to pay back the loan, the interest that ends up being paid can end up being 100% more than the principle amount.
Benefits of Secured Loans: One of the most important benefits of a secured loan is that one can eliminate or reduce the cost of interest by shortening the life of the loan. If one uses a title, deed, or an insurance policy as collateral for a loan, if you are unable to repay the loan, you or the lender can liquidate those assets to pay back a considerable portion of the loan, if not the entire loan in full. For example, if one has $150,000 lent to him or her, and he or she has $75,000 in real-estate or car titles, and he or she fails to pay or decides that he or she no longer has the willingness to pay, his or her collateral will cover 50% percent of the loan, which shortens the amount, life, principle, and interest of the loan, versus being liable for 100% of the principle and interest.
LoanMart Loans and Benefits
LoanMart is a secured loan lender: meaning it has all of the benefits of a secured loan as previously mentioned. LoanMart specializes in auto titles loans. This type of loan can be very beneficial for its customers, for instead of one putting 5% or 10% down in cash as down payment for a loan, cash that can be used for other expenses, one can use his or her car’s title for, possibly, 50%-100% of principle collateral toward his or her loan.
LoanMart is a direct lender. Unlike dealing with a broker, who may not be as knowledgeable about the policies and requirements of the lenders they represent, LoanMart deals directly with its customers: leaving room for more flexibility. For example, if one is having trouble repaying the loan, a quick phone call or email can give borrowers the breathing room needed to adjust and continue making payments. LoanMart is a great source for a secured loan and quick cash1!
Go and Get your Loan!
Now that you understand how loans work, you can start your journey towards getting one. Using collateral for your loans can be the best method for receiving a loan if your credit is not good enough to receive an unsecured loan. Using assets, such as your title, for loans almost ensures that your loan will be approved1. A secured title loan can be the safest bet for the borrower and the lender.