Bad Credit Loans (Part 2) : Wealth Looks For Investing Money


Here’s the Video Transcript:

Below is the Video Transcript:

Alright guys. So now this is how it
looks like on the Investor side right. So as you can see here right, the loan
requests are presented to the Investors are in letters ok. So basically the
safest loan is going to be an a right and the most or the riskiest loan is
going to be an E and here you can see what the interest rates average averages
are within each individual rate or a class right if we want to call them
Class A Class B Class E etc okay so I just wanted to show you the way it looks
like on the investor side right so that way you can get a better understanding
or an idea as far as what your application may look
like once it’s presented to all the investors right another thing I want you
to keep in mind is the actual applicants credit score is not so much a factor as
you can see here in this case right this is considered an a class loan right
which is supposed to be safer but as you can see here as far as their the FICO
score of the applicant it’s actually lower than the much riskier type of loan
right it’s actually higher and the loan request amount this person is requesting
24,000 while this person is requesting a lot more 40,000 right and it’s still
considered a less riskier applicant so just because you have bad credit doesn’t
necessarily mean that they’re gonna classify you as a high risk applicant
okay you may still come over here and apply and still be considered a somewhat
safe applicant right so just because you have bad credit doesn’t necessarily make
you a risky applicant okay which is great so let’s go into a little bit more
detail of what it looks like once they click inside your application right so
what they’re going to see first of all what the monthly payment of the loan is
gonna be of this particular loan okay they’re gonna see your job title they’re
gonna see your location and remember what I suggested I if you live in like
let’s say major cities where the cost of living is a little bit higher like New
York and California they’re gonna want to see that your individual monthly
income is a little bit higher right so again like remember I recommended you
know at least what I look for when I’m gonna lend money right when I’m gonna
actually lend the money as you can see here this loan request is almost funded
right so it’s considered as a risky loan but look it’s already ninety percent of
the loan request it is already funded right and this is the amount of days
that they give you to get it funded right it’s not gonna necessarily take
twenty six days for you to get funded but that’s how much time they give the
investors to fully fund the loan okay makes sense
all right so believe it or not these two get funded quick because look how much
interest this lender or this investor is gonna earn on their money right and they
can invest as little as $25 right just to be a part of this loan
okay so again it’s not like just one investor has to invest the full amount
that you’re requesting right Lending Tree pulls all the investors together to
go ahead and fund your loan that’s why these loans tend to get funded very
quickly right so it can be as little as three to seven days and you can get all
your money funded so other things to look at in your
application right whether the applicant is a homeowner or they rent how long
they’ve been employed for so as you can see the things that are determining this
to be risky right even though this person had a higher credit score than
what the a type loan was as you can see here it’s the amount of delinquencies
like for one they’ve got a public record on file so whatever that that record may
be the investor doesn’t actually see what the specific public record is so
whether it be you know let’s say an eviction notice or you know maybe you’ve
got a criminal misdemeanor on your record
the investor doesn’t actually see what it is but when lending does their
background check it just comes up as like one record it was found on file or
maybe two or three or whatever it is right so the reason this is a little bit
riskier is because it’s coming up with delinquencies right so here says like
how many delinquencies did they find as far as like you’re not paying alone or
you was late on the credit card payment these are considered minor delinquencies
okay a major delinquency is like if you went
bankrupt or you know you fail to pay your mortgage and they foreclosed on you
those are major they call a major derogatory hits right on your record so
as you can see here this person has got to it they’ve got a minor delinquency
within thirty four months like what the last two years right would be twenty
four months right they’ve got nothing but the last link would see has been in
the last thirty four months okay does that make sense so what I look for is
mostly here within two years I don’t care if you’ve got one but if you got
like two or three then that’s gonna raise a red flag for me as far as
wanting to invest in your loan request but that doesn’t necessarily mean that
the other investors won’t right as you can see here this loan request is
already almost funded okay so again the beauty about this is that investors want
more return for their money so they’re willing to take
that risk and again it’s not a big risk because they can lend as small as $25
just to put their money in with all the other investors to fully fund this loan
and here the long-term is for 36 months when you see this checkmark it’s that
they actually verify the income of this application which you would think that
this would make it a less riskier loan but this one is considered a higher risk
because one they’ve got a lot of revolving debt which is another thing
that I don’t really mind right because if you didn’t have high revolving debt
then most likely you wouldn’t be here requesting a loan right right and and
the purpose of the loan is loan refinancing consolidation right so
common sense you are gonna have some debt but what does raise a red flag is
if I see that the loan request amount is less than what you already owe that
raises a red flag for me as an individual investor because that makes
me think that you’re just gonna add on to your debt
instead of taking the money to pay off the debt so because this loan is
requesting is higher than what you already owe then that makes sense okay
that makes sense that means that you’re gonna use this money to pay off your
debt okay but again the reason this is considered to be a riskier loan is
because you’ve got major derogatory hits not only that but the also finding
public records and you’ve got minor delinquency also as far as like within
the last thirty four months maybe you were late for a credit card payment okay
that would be a minor a major again it’s like if you got foreclosed on for a
mortgage or you’ve got bankruptcy those are the major ones so when those start
getting hits as far as your credit history that’s gonna make it a riskier
loan okay but again just because you have bad credit history doesn’t
necessarily mean that your application is not gonna get approved it’s quite the
contrary right because at the end of the day the investors want better return for
their money right so the higher the interest rate the more willing they are
to lend you money this one this person is requesting forty
thousand right and it’s still considered less of a risk right it’s considered an
a which is like the best type of loans applicant okay so and look they’re
saying they earn $18,000 a month right and they’ve been employed for less than
a year and they did not verify their income right so this is for whatever
reason right Lending Club is not considering this a riskier loan than the
other one I just showed you for only twenty four thousand why is that this is
why because when they pulled the credit this person had no delinquencies within
the last two years but they did have a delinquency within the last thirty three
months right so but you can see here they have no public records on file they
have no collections as far as like medical expenses and things like that
and they have no major derogatory offenses so no bankruptcies no
foreclosures nothing major right and look and this person already has debt
for forty five thousand dollars okay so as you can see here more weight is put
on your credit history as far as I public records and major derogatory hits
on your credit then whether or not you have a high credit score because you can
see here this applicant has a lower credit score range then this person
who’s considered to be a higher risk right but they stated that they make
$18,000 a month okay and their job title is regional property manager so keep in
mind when you’re saying what your job title is it’s gotta reflect how much
money you’re making okay you can’t say you’re making $18,000 a month and then
your job title is waiter at an Applebee’s or Chili’s or something like
that right not that there’s anything wrong with that everybody’s got to make
a living but what I’m trying to get at is it’s got to make sense right cuz if
you’re coming in here making some outlandish claims as far as like what
you make monthly but meanwhile you’re only a waiter that’s gonna raise a red
flag then you’re gonna force Lending Club to
verify your employment and verify your income okay so that’s why I’m trying to
tell you these things so you can avoid being red flagged enforcing Lending Club
to verify your income this person is saying that they’ve been employed for
less than a year and it’s still considered one of the best applicants
okay so be honest in your applications I’m
just telling you what I look for as far as you know if I would invest myself in
this loan request but it doesn’t necessarily mean that other investors
will not lend you money or not funds your loan okay so at the end of the day
be honest in your application and make it make sense right so let’s recap real
quick on what I look for in an application and what you should do to
avoid having your loan or your application getting red flag


Bad Credit Loans (Part 2) : Wealth Looks For Investing Money

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