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What is a subprime loan/non-conforming loan and why should I look at these if I have bad credit?
Unfortunately, it is a fact of life that those with bad credit must work much harder to get any kind of credit extended to them. While the best thing you can do is to set aside a few months to a year to work diligently on raising your credit score, many people find themselves in emergency or timed situations in which they do not have an extra chance to bring up their score. In these times, there are several agencies you can meet with, people who will help you, and specific kinds of loans that you can get.
For example, if the lender you are applying with deems you as risky because of any negative factors in your credit report, they may be able to offer you a subprime or non-conforming loan.
Basically, they are recognizing that you have a higher potential of defaulting on the loan that people with good credit scores. These loans, depending on their size, and your debt to income ratio may not fall under a bank or lending institution's normal borrowing rules. Because of this, you can expect to pay a much higher rate of interest than people with good or excellent credit scores. You can also expect to pay higher monthly payments as well.
The bottom line is that while there are banks and lenders that will give you the money you ask for, you need to really think about how much you need that money. Is it worth having to pay so much more in the long run? It may be, but if you have any extra time at all to devote to raising your credit score, it would be wise to do so.
If you can spend even just a few months making sure all bills are paid on time and paying down your current balances, it could lower your interest rate. Even lowering the rate by a couple percentage points could add up to an extra hundreds or thousands of dollars in your pocket, depending on how much you borrow.
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