When You Know the Lender
Doing a private loan with somebody you know? Anything is possible. They get to decide whether or not your bad credit is an issue.
If you do a private loan, make sure you do it right. There are legal, tax, and relationship issues to manage. The best way to handle a private loan (whether you have bad credit or not) is to document it.
Private Loans from Strangers
Getting a private loan with bad credit is difficult. If you don’t have a lender, you’re less likely to qualify for a loan and you’ll pay more. Peer to peer lending services may work, but many of them require decent credit. You’ll improve your chances if you have a compelling story for lenders. Work on building credit, and also consider small banks and credit unions.
Private Student Loans
Private student loans are unique. If you’ve already exhausted government sponsored loan programs, you may want to use private loans designed for students. They can have more favorable terms than other loans, but they’re rarely as friendly as government sponsored programs (see Advantages of Federal Student Loans).
The Building Societies Act 1986 is an Act of Parliament of the United Kingdom governing building societies (mutually-owned mortgage-lending institutions). It removed certain restrictions on the range of services they could offer, so that they could compete with banks on a level basis: they could now make unsecured loans, offer cheque accounts...
Credit risk is an investor's risk of loss arising from a borrower who does not make payments as promised. Such an event is called a default. Investor losses include lost principal and interest, decreased cash flow, and increased collection costs, which arise in a number of circumstances:
Credit risk can be classified in the following...