What caused you to fall behind on your present mortgage payment?
You need to be able to explain how you came to your present financial difficulties. A private money lender will certainly want to know what led to your problem ?how you lost your job, incurred medical expenses, happened into a failed investment or real estate venture, etc. It is important to be truthful on this point because the lender will most likely find out sooner or later, and hiding facts will get you no closer to obtaining your bad credit personal loan.
From a long term perspective, it is important to insure that you do not get into another difficult financial situation in the future. If you really stop to analyze how you came to be in the situation you are in, you can better prepare to insulate yourself for any potential problems going forward.
What is your monthly income level?
Understanding your resource and income base will give you an accurate idea of what you can afford for your California bad credit personal loan. The interest that you will pay on a bad credit personal loan will be significantly higher than on an institutional loan from a bank. You need to be sure that you can afford these payments -- missing your payments could result in the loss of your property.
In order to assess your resource and income base, write down your monthly income ?this should include your salary, any disability or insurance payouts, retirement income, welfare benefits, investment income, etc.
What are your monthly expenses?
Your actual income level is derived by subtracting your monthly expenses and financial obligations from your monthly income level that you determined in the previous step. Your monthly expenses should include your existing mortgage payments, car payments, credit cards, insurance, school loans, child support, utilities, etc. If you are transitioning into a bad credit personal loan, you need to determine how much more your payments will be each month and also subtract this from your income amount. What you are left with is your disposable income ?this figure should be enough to allow you to cover your day to day expenses.
What are your present and future financial plans?
Sitting down and figuring out how to solve your current crisis today is an important step in insuring a comfortable financial future. Reducing your monthly expenses, or at least budgeting for all of your expenses, will insure that you can make your minimum monthly payments ?helping you avoid missing payments and further hurting your credit score.
Perhaps more importantly, begin to develop a plan that addresses your long term financial goals. Your attitude, outlook, and plan may affect how willing a bad credit lender is to helping you out with your bad credit personal loan. A bad credit personal loan term should ideally be between 12 and 18 months. By the end of this loan term, your credit should be high enough to qualify for a sub-prime loan or A paper loan.
The intrinsic idea behind a bad credit personal loan is to obtain a loan to hold onto your property and, in doing so, to mend your credit and thus build a solid financial future. This is coincidentally why obtaining a bad credit personal loan is always a better alternative to declaring bankruptcy.
Corey Senn is a Senior Partner with Bad Credit Lender, a California based private lender that specializes in hard money and bad credit loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California bad credit loans, bad credit personal loans, and bridge loans. In addition, Corey is one of the main contributors to the California Home Mortgage Loan web blog.