Bad Credit All Purpose Loans in Kansas (30k), Arkansas (50k), Oklahoma (100k)

Today we are meeting to talk about three particular loans in three more different United States. We are going to visit Kansas first of all, then off to Little Rock, Arkansas, and then were going to finish in Oklahoma. All of these loans are not payday loans. These are all your normal installment type loans such as you would get from your typical consumer level bank.

Over in Kansas we have a $30,000 debt consolidation loan that was taken out for a four-year term – this was for student loan debt, and in Arkansas we had a five-year loan to cover medical expenses – actually accumulated debt. Finally, we end up over in Oklahoma with a 10 year term for a business loan startup of $100,000.

Before we start discussing each specific loan example, we need to point out that all of these applicants and borrowers have poor credit ratings. Out of the three different loans the highest FICO score that any of them had was 612. This made sure that along with their high DTI (debt to income ratios) being collectively averaged out at 59%, there was no conventional banks that would consider qualifying any of them for credit.

So let’s get started.

$30,000 BC Student Loan Consolidation in Kansas

So let’s move over now to the border of Kansas and Missouri. It’s easy for Missourians to claim Kansas City for their own if you were to look purely as a surveyor and map maker, but in reality Kansas City has its heart in both Kansas and Missouri – end of story. However, this is not a history lesson, today we are in Kansas City to talk about a loan transaction between a borrower and a private lender for a debt consolidation of $30,000. As we mentioned above this borrower has a low FICO score of 578, making her virtually nonexistent in the eyes of any banking establishment operating in the State of Kansas.

The young woman who is the applicant from Kansas City is only 25 years old and has managed to accumulate $30,000 in student loan debt which she really needs to clean up. Not all of her debts are from one student loan, but there are actually four different student loans with different lenders that she is defaulting with.

She tried to get her first consolidation loan with the Liberty Bank and Trust Company on N. 5th St., and her second consolidation loan attempt was with the Water and Light Credit Union on Minnesota Avenue – both were a no go. She even tried to look into getting all of her student loan debt consolidated into one loan through the government and get a lower interest rate, but unfortunately her family was much too well-off to make her eligible for any kind of government assistance. So what does a kid do when mom and dad are rich but mom and dad are not going to help with the bills. Basically, if you can’t get help from family, and you won’t be eligible for any kind of public money – you’re on your own.

So our young lady decided she would have to get some private money if she was going to be able pay off all of her outstanding loans in one shot. She decided to go online and look for some websites that had Peer-To-Peer lending options. She tried using some of the bigger peer to peer sites like Prosper but getting approved for $30,000 with her credit rating was seemingly out of the question. The truth is, this borrower was not one that most people would take a chance on.

At this stage of the game she started to wonder about getting a loan from a loan shark operating somewhere in Kansas. She considered getting a loan outside of Kansas City – somewhere where nobody knows her name and she is completely anonymous, but she was also nervous about it and she thought about maybe getting a loan with a loan shark as far as Junction City, Lawrence, Wichita, or Topeka.

So, when she went online she found FUSA and made her application for credit known using the form you see at the bottom of the page. She put plenty of information about her loan (which you won’t find on the website now, because we remove old pre-application data after a certain number of months) and let the lenders understand her situation completely, and let them know about your employment as a wine sales rep operating out of Overland Park in Kansas City. Within 48 hours she had an e-mail back from a lender who wanted to speak online with her using Skype. They did a Skype video call and sorted out some of the details, and she scanned some of her information and send it forth using her Yahoo! e-mail account. So the deal was struck.

Below you can see the terms of this student loan debt consolidation for $30,000. This was a four-year loan at 10% interest utilizing a monthly payment structure.

$50,000 BC Loan in Arkansas (medical expenses)

For the second loan we head Southeast down to Little Rock, Arkansas where a 53-year-old gentleman was trying to pay off his medical expenses that had ballooned into a debt because the insurance company found a way to weasel out of their agreement with him. They claimed that he had pre-existing conditions and they snuffed him out of the cash stream.

He wanted to borrow $50,000 from a private lender for a term of at least 3 1/2 years. His credit was also bad  – a 612 credit score.

He is on a medical leave still from his job because he can’t work due to a bad heart. He has very little money and yet at the same time he wants to pay off the hospital who has been so good to him. He had his heart operation (triple bypass procedure) at the Arkansas heart Hospital over on S. Shackleford Road. He feels obligated to pay his debt to the hospital considering that they saved his life and that they were so good to him before his heart operation and after his operation (with recovery). His operation went off without any kind of complications and he is extremely grateful to the professional staff there. Who he is not grateful to, is the insurance company that stiffed him for the money – they should have been paying for all of his medical expenses.

This applicant is now basically retired at an early age and has a limited amount of money coming in each month that could be used as some form of security for a lender. He is living with family now, so he doesn’t have to pay any rent for the time being, but that could change at any time because he hates being a freeloader (his words – not ours).

He told the lender through the pre-application form that he needed to make sure the payments were monthly and they were below $1100 per month. As it turned out, as so many other applications, the borrower lives not far away, and in this case lives in Sheridan Arkansas. (if you are not familiar with Arkansas you get to Sheridan by going directly south from Little Rock down Highway 167 or highway 530 if you want, but I like to take a shortcut off of the main highway 167 straight down into Sheridan).

The lender complied with a $50,000 loan over a five-year term and at a 9% interest rate. You can see in the form below (table, I should say) that the payments on this loan came to exactly $1009.90 per month. That is almost $100 less per month than what the borrower claimed he could afford to pay down on the note. You will notice that this interest rate is a couple of points higher than your average everyday car loan which is about 6% to 7%, depending who you are, and where you are.

$100,000 Bad Credit Business Loan in Oklahoma

Our last loan today that we have to take a look at is in Oklahoma. This was for a business start up that was requested by a borrower living in Oklahoma City. He has business partners in Tulsa, and in Norman. His partners and him want to invest in a franchise restaurant business and they were short $100,000 (approximately). None of his partners or himself have any experience running a restaurant, and finding a willing lender these days is damn near impossible for any kind of business start up. As we all know, the economy in Oklahoma didn’t escape the downward turn since the 2008 crash.

The terms of this loan ended up being as requested – for a ten-year term and the lender insisted on a 13% interest rate (which is high). This loan is really somewhat like your average everyday run-of-the-mill hard money loan. A hard money loan, being one that is for a higher interest rate, and a short-term. So that is why this loan is “somewhat” like a hard money loan. This loan is at a high rate, but it is not a short-term business financing deal. It’s a longer-term, ten-year loan with biweekly payments that came to $633.83.

The good news, that you should know now, is that our borrower was successful in getting approved for this loan with a private lender, and their restaurant business flourished since 2010. This December 2011 will mark the first year of business for this borrower and his partners, and they have made a profit already. Which is amazing if you know anything about the restaurant business at all, and how long it takes to start carving out a profit every year. Sometimes it take 3-4 years before any kind of profit is coming in on the black.

You can see that with this kind of lending, that lenders who are willing to take the risk of funding and providing the capital to small business owners, can profit greatly. I have seen conventional hard money lenders that charged less interest than this (at 13%) over a short-term of six months, and that’s pretty damn good return on your money.

Of course there is no getting around the State and Federal laws regarding usury limits, but when it comes to some of these hard money lenders across the United States, no one really knows the actual terms of the lending transactions. We certainly don’t know the exact terms on these deals either.

We of course encourage people to never take a loan that is more costly in interest than what their State stipulates as a legal interest rate. We also screen the lenders who use our database in an effort to make sure they are not exploiting the borrowers with extremely high interest rates. and acting as illegal loan sharks.

Of course sometimes, the borrowers live in different States than the lenders. You would be surprised how many times though, the lenders and borrowers choose to do business with people who live close by, or within a short proximity of each other. I suppose they feel there is some sort of security in lending to a neighbor instead of a distant stranger.