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-- Loans for people with bad credit?

Loans for people with bad credit?

So a friend is wanting to start a business, long story short, the bank won't give him a loan unless he gets a co-signer due to his bad credit history.

He has approached me for some help to see if I can co-sign..Now, i'm all for helping friends out and he is totally capable of making the payments on this loan as he has been working full time with the same company for over 2 years. However, I'd just really like to avoid a situation (cause anything can happen right..?) where he ends up not being able to make payments and i'm on the hook for it.

With that said, are there other options I can present to him before I decide to help him? Are there places that specialize in giving loans to people with bad credit? I guess a place like that would have ridiculous interest rates?

Again, i'm all for helping a friend out...but i'd rather see if there are other options I can put forward to him before I do so..

Does he actually have any established credit that isn't bad??

If so then he may be able to get something with Citifinancial or HSBC. Wells Fargo has closed down so that isn't an option for him anymore but it would have been the best bet. These loans would be higher interest loans as well ranging from 18-34% most likely. Unfortunately the banks will not touch him these days. I have seen plenty of customers in the past with just a few glitches on their bureau and the banks still want a co-signer.

If he doesn't have any established credit and it is all bad, he is going to need to get a secured credit card to re-establish that credit and wait it out 8-12 months or he has no choice but to get a co-signer. He can get one of these easily with Capital One. He may also need to find a way to clear off his bad debts as well before anyone will look at giving him a loan.

Although you are friends, I do not advise you to co-sign for your friend to help them out. I have seen a lot of friendships go sideways in my lifetime and a lot of people stuck paying debts that weren't their own to begin with.

Good luck!

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Originally posted by magikb Does he actually have any established credit that isn't bad?? If so then he may be able to get something with Citifinancial or HSBC. Wells Fargo has closed down so that isn't an option for him anymore but it would have been the best bet. These loans would be higher interest loans as well ranging from 18-34% most likely. Unfortunately the banks will not touch him these days. I have seen plenty of customers in the past with just a few glitches on their bureau and the banks still want a co-signer. If he doesn't have any established credit and it is all bad, he is going to need to get a secured credit card to re-establish that credit and wait it out 8-12 months or he has no choice but to get a co-signer. He can get one of these easily with Capital One. He may also need to find a way to clear off his bad debts as well before anyone will look at giving him a loan. Although you are friends, I do not advise you to co-sign for your friend to help them out. I have seen a lot of friendships go sideways in my lifetime and a lot of people stuck paying debts that weren't their own to begin with. Good luck!

Wow. They can go up to 35%. That's insane. I know, trust me, i've been mulling it over for a few days, i'm extremely hesitant. He's a great friend, which is why i'm even considering it. I'm certain his credit is just all bad. You know the story, got credit cards at a young age, became irresponsible, yadda yadda.

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Originally posted by spiderpig Wow. They can go up to 35%. That's insane. I know, trust me, i've been mulling it over for a few days, i'm extremely hesitant. He's a great friend, which is why i'm even considering it. I'm certain his credit is just all bad. You know the story, got credit cards at a young age, became irresponsible, yadda yadda.

They sure can. At Wells Fargo we went as high as 39.9% on small loans until 2k. I have heard stories of the banks charging 32% for tiny loans as well, but that is just from customers approvals on small amounts.

As for his credit being all bad, the likelihood of either Citi or HSBC giving him cash will be slim to none as well then. I have worked for all 3 companies I have stated and with Citi and HSBC being the only financial companies remaining that tend to do high risk loans, they don't put on too many deals that have a lot of risk to them. Over the years they have drastically changed their lending policies to better protect themselves.

I only really know the sub lending, but I am sure that people on this forum who have banking knowledge may have some other ideas for you.

Go to Oliver's Jewellers, he's the "Cash Man" and also known as "The Loan Arranger".

No joke, he can actually hook most poeple up with larger loans. When I worked for BMW years ago, he would get guys financed on $80,000-$100,000 cars when I couldn't a thing for them internally. Guys with BAD credit. Not sure how he did it to be honest, as some of the loans were actually coming from the same banks that we had tried.

Although you can expect to pay a premium for this obviously, some of the loans I saw were through normal banks at normal rates. But you did pay a fee to get the loan of a couple thousand.

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Originally posted by spiderpig Wow. They can go up to 35%. That's insane. I know, trust me, i've been mulling it over for a few days, i'm extremely hesitant. He's a great friend, which is why i'm even considering it. I'm certain his credit is just all bad. You know the story, got credit cards at a young age, became irresponsible, yadda yadda.

Be very careful, he may have the best intentions to pay you but running a business is hard and unfortunately most fail. The number one reason a business fails is cash flow, so if he's already trying to start one on all borrowed money it's not looking good unfortunately. He should try and get some investors with some cash flow first...

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Originally posted by cammaxwell Go to Oliver's Jewellers, he's the "Cash Man" and also known as "The Loan Arranger". No joke, he can actually hook most poeple up with larger loans. When I worked for BMW years ago, he would get guys financed on $80,000-$100,000 cars when I couldn't a thing for them internally. Guys with BAD credit. Not sure how he did it to be honest, as some of the loans were actually coming from the same banks that we had tried. Although you can expect to pay a premium for this obviously, some of the loans I saw were through normal banks at normal rates. But you did pay a fee to get the loan of a couple thousand.

I was waiting for an "LOL" after your first sentence. Surprised there wasn't one!

Thx for the suggestion! I'm guessing he will def get raped with a ridiculous interest rate should he go to Oliver. Either way, this is good as I can put it on the list of options for him to try before we go any further in regards to me co-signing.

I would never get money involved in a friendship. It's not about not doing anything for your friend, it's that this kind of thing has great potential to change the dynamic of a relationship and subsequently to ruin it. I've seen many friendships destroyed over money.

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Originally posted by spiderpig I was waiting for an "LOL" after your first sentence. Surprised there wasn't one! Thx for the suggestion! I'm guessing he will def get raped with a ridiculous interest rate should he go to Oliver. Either way, this is good as I can put it on the list of options for him to try before we go any further in regards to me co-signing.

Well, you would assume a high interest rate yes....but again I saw him put people them through the normal banks and get normal rates. I'm not even sure how he did it, especially when those banks had already turn the same people down, but I do know it cost a upfront "fee" (not something that you normally see). I always assumed he was giving someone a kickback to make it happen, didn't sound 100% legal.....but it was getting done...a lot!!!

wasn't spiderpig a fake account?

lol.

anyways, do not co-sign with your friend. he will have to think of something else.

If your friend had problems paying banks or creditors back, what makes you believe he will pay YOU back?

Did he offer you a clear re-payment schedule? Did he offer you collateral?

quote:

Originally posted by cammaxwell Go to Oliver's Jewellers, he's the "Cash Man" and also known as "The Loan Arranger".

I totally forgot about him. How could one forget with his commercials all over the TV. I totally agree this is probably the next best bet for your friend. This guy can apparently get anything for anyone, see if it's true.

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Originally posted by StereoPrincess wasn't spiderpig a fake account? lol.

Really?? hmmm... oh well, lol

There are two things...

How good of a friend??

And if he's a very good friend who you are willing to cover for if he can't make the payments...

That would be the same as lending him the money yourself...

If you can afford to lend him the money, then why not? You just have to be prepared is all...

I have friends who I'd be prepared to lend money too on a long term basis...

But not many...

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Originally posted by jennypie I would never get money involved in a friendship. It's not about not doing anything for your friend, it's that this kind of thing has great potential to change the dynamic of a relationship and subsequently to ruin it. I've seen many friendships destroyed over money.

+1. I lend money to friends like I gamble - only put up what you can within your means and be willing to lose it all.

Never, ever, co-sign for anybody (including your family).

Now, if you want to give the money to your friend/family as a gift, that is perfectly acceptable.

But otherwise, lending the money or co-signing is just going to ruin your friendship and create more problems than it is worth.

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Originally posted by rabbitjoker Now, if you want to give the money to your friend/family as a gift, that is perfectly acceptable. But otherwise, lending the money or co-signing is just going to ruin your friendship and create more problems than it is worth.

I'd say this is mostly true however there are exceptions.

I have done it with family before and have just taken my name off the account after the fact.

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Originally posted by Endlesswave I'd say this is mostly true however there are exceptions. I have done it with family before and have just taken my name off the account after the fact.

Usually only banks will do that as long as the other person meets the qualifications on their own and has a perfect repayment history on the account.

If that other person screws up just once, the co-signer will not be removed. Also keeping in mind that as long as you are co-signed on something with someone else, it is also included on your credit bureau and in your debt ratio. So if you want to apply for something yourself you are taking the risk you won't be approved for it if your income isn't in line.

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Originally posted by magikb Usually only banks will do that as long as the other person meets the qualifications on their own and has a perfect repayment history on the account. If that other person screws up just once, the co-signer will not be removed. Also keeping in mind that as long as you are co-signed on something with someone else, it is also included on your credit bureau and in your debt ratio. So if you want to apply for something yourself you are taking the risk you won't be approved for it if your income isn't in line.

Yep.

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Originally posted by rabbitjoker Never, ever, co-sign for anybody (including your family).

why not your family?
my father has co-signed for me many times in the past because i had no credit history to begin with.

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Originally posted by geroin my father has co-signed for me many times in the past because i had no credit history to begin with.

Children are probably a bit of an exception - co-signing is essentially meeting them halfway between a very generous gift and unflinching tough love. And since they're financial dependents, you probably already have a sizable leisure budget for them that you can shrink if they can't handle the responsibility. (And if you don't, then you're probably not the type of parent who would ever co-sign anyway.)

Under any other circumstances I'd say no. If it's a life-threatening emergency then I don't need them to pay me back, and if it's any other kind of "emergency" then I'd expect some kind of collateral.

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