Information Required

The information required to apply for secured loans can vary widely depending upon the kind of loan sought, although it should be noted that it is possible to apply for this kind of financing without undergoing a credit report.

Most lenders will require an applicant to provide evidence of the collateral, an appraisal of the collateral, information for a credit report, and proof of income. Other lenders may have specific information requests.

Basic Information Needed for Secured Loans

There are some types of secured loan lenders that will request only proof of income and collateral. Proof of income usually takes the form of bank records indicating that a business or individual has the cash flow to cover the loan payments.

Proof of collateral usually indicates legal proof of ownership of the collateral and some verification of the value of the collateral. In the form of real estate, this usually takes the form of an appraisal signed by a licensed appraiser.

Secured loans without a credit check will usually come with a much higher interest rate. Many bad credit loans also come with very strict terms such as mandatory automated payment plans. This means that a person will have to provide the routing number and account number for a checking account. The lender will then have the borrower sign an agreement to take the payment out on predetermined dates.

Credit Reports and Secured Loans

It is usually possible to get a much better interest rate and easier terms on a secured loan if a credit report is run. The reason for this is that a person with a good credit rating is viewed as less of a risk.

Many lenders will not deal with those who have bad credit ratings. Most persons and businesses with bad credit can get secured loans but they will pay a higher rate.

Something to consider is that credit agencies may lower a credit rating every time a credit report is requested. A lower credit rating can make it harder to get loans and other forms of credit. This means it is a good idea to limit the number of loan applications filed.

It is also a good idea to avoid having a credit report issued if a person knows he has a bad credit rating. An individual can avoid this situation by contacting the credit agencies directly and getting a copy of his credit report. This can be given directly to lenders along with the loan application.

Information Needed for Secured Loans

The basic information needed to apply for secured loans includes:

  • The name and physical address of the individual or business applying for the loan. P.O. boxes and other mailing-only addresses cannot be used for this purpose.
  • The mailing address is also required.
  • The Social Security or Tax Identification number of the individual or business is necessary to perform a credit check. This is often required in secured loan applications with no credit check.
  • Legal documents proving ownership of the collateral will definitely have to be provided. This includes a title in the case of a vehicle, or a title or mortgage to property.
  • A copy of an appraisal or other document verifying the value of the collateral will also be required.
  • In the case of many secured loans, including hard money loans, documentation verifying income such as banking records will be required.
  • Most online-secured loans will also require an applicant to provide the routing number and account number for a checking account. This is often needed to wire the funds borrowed to the borrower and to collect payments.
  • Contact information such as the mailing address, telephone number and e-mail address.

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