People with bad credit know how hard it can be to get a loan.
Lenders would obviously prefer someone who has good credit scores and a solid credit history. They want someone who will not have any difficulty repaying the loan on time. After all, they are investors and they want to make sure that they get their money back with some profits too.
“I need money fast with bad credit”, is that what you are saying? You can still get a loan. Yes, it can be quite a challenge but it is possible.
What loan options do people with bad credit have?
Well, just like regular loans, bad credit loans can be secured or unsecured. Let us present the advantages and disadvantages of each one.
Unsecured loans. This is a loan which does not require any collateral or property of value as security. Credit cards are one type of unsecured loans. If you fail to repay the loan, your credit score will go down but you need not fear losing your possessions.
The lender relies on the borrower to repay the loan. However, lending to people with bad credit and money problems who do not have any collateral is very risky and that’s the reason why the interest rates of this loan is very high. The loan amount you get is also usually very small.
No lender would lend a big amount to a person who has bad credit and who does not have any collateral. Although there is no collateral, when you default on the loan and it gets referred to collectors, you can still lose your possessions.
- Secured loan with bad credit. This is a much better option for people who have bad credit. They can get lower interest rates because of their collateral and they can also get bigger loan amounts, depending on the value of the collateral used. Collateral can provide you with a safety net. Collateral loans makes it safe for lenders and a little easier for borrowers when it comes to loans.
- Payday loans. This is a type of loan which is promoted and discouraged at the same time. Payday loans can be very helpful because they are very easy to apply for and get. There is no credit check so you can apply even if you do not have good credit. Sometimes you can even find a payday loan with no employment check. However, the payment term is very short, only 14 days and the charges are also very high. You can get charged as much as $30 for every $100 borrowed.
- $10,000 loans. A loan for $10,000 is not too hard to come by if you have decent credit, a steady job and most likely some collateral. Many times you may need to get a co-signer with better credit than you in order to get the loan, but if you have someone you know who might be able to help you out in this manner it doesn’t hurt to ask if you need money fast.