Taking out Loans with a Criminal Record
Why would you need to take out a loan in the first place? Well, perhaps you have managed to get a job (which may be a challenge in itself with a criminal record) but you need a car to get there.
To be able to purchase that car, you may need a loan. Or let’s say you’re going back to school. If you have a drug offense on your record, you are ineligible for Federal financial aid. Higher education isn’t cheap, so you’ll probably need a loan there too. Maybe you have the opportunity to own your own home. For that, you’ll need a considerable loan.
Problems with Taking out Loans with a Criminal Record
Lending companies base their decisions on whether to give out loans on their assessment of risk. The less likely they believe a particular individual is to pay back a loan, the higher the interest rate, if they agree to give out the loan at all.
Whether fairly or not, most loan agencies view a criminal record as an indicator of lack of reliability, and therefore those with criminal records can usually expect to be denied loans or have to pay much higher premiums and interest to get one.
Fortunately, there is an answer. You can expunge arrest records in many states if you fulfill certain requirements. These requirements are generally that you have only one offense on your record, have waited a sufficient amount of time before applying and have not committed any other crimes in the interim, and were convicted of a crime that did not involve a minor or a sexual offense. Meeting all of these criteria does not guarantee expungement: the rules vary from state to state and you will still need a judge to decide on your individual case. However, if you meet these requirements, you should consider applying for expungement.