Some issues effect all bad credit borrowers but vary in severity. Interest rates will be higher. While some may be surprised or offended by this the concept is understandable. A rate of interest is computed by taking into consideration the general rate of interest nationwide at the time the loan is made and the specific risk of the particular loan in question. Commonly the prevailing rate of interest in the US is expressed as the prime rate, which is the rate of interest a bank may charge its very, very best customers.
Competition results in the prime rate at most banks being the same or within a half a point or less.
The current prime rate can be found in any financial publication such as the Wall Street Journal or on the Internet . These other rates usually dictate mortgage rates while the prime controls most credit cards and car loans. Before even taking one's credit into account these add ons will first be gauged on the type of debt. For example a home equity loan where the creditor receives a security interest in a debtor's primary residence, may bring with it little or no special additional risk. Lenders consider your house the collateral which you most vigilantly protect and thus the debt mostly likely to be paid by a debtor.