How to Get a Bad Credit Personal Loan
Bad credit can be the result of one’s inability to pay bills on time. Whether the month goes over your scheduled paycheck or an emergency expense arises, at times you might need a quick loan for additional cash. The good news is there are lots of options for secure loans with bad credit. The bad news is some of those loans are quite risky and could put you in an even worse financial situation than when you began. The key to finding an option that will help you with immediate cash is to do your research and know what type of lender is right for you. Here are some tips:
If you have collateral to use as a form of security,
you have a good chance of getting good rates on unsecured bad credit loans. Collateral can include anything from a car or a home to an expensive electronics item. If you do not own property of value, you cannot secure a loan of this type. However, it is possible to find lenders who specialize in providing this type of personal loan.
To determine whether a prequalification
is necessary before signing on the dotted line, ask potential lenders about their process for doing so. Often, you will be asked to submit proof of income, assets, and employment history to receive a quote for a secured loan. Once you are given a quote, you will need to sign and return the application in its entirety. Lenders may also require you to submit copies of your most recent bank statements and a recent pay stub or tax returns to verify employment.
Unsecured bad credit loans
are available to any individual who has a bankruptcy filing on record. These loans also come in the form of installment agreements. Installment agreements are payment arrangements that allow you to repay the loan over a set period of time. This type of loan allows borrowers to repay the amount owed in increments, making it more feasible to manage monthly debt.
you are unable to secure an unsecured personal loan from a traditional lender, you might want to consider talking to a bad-credit credit union. Bad credit unions are private not-for-profit lending institutions. Because they do not need to worry about securing new lines of credit on individuals, they are often willing to accept a personal loan with higher interest rates. Instead of paying a high interest rate that is customary for unsecured loans, borrowers take out a bad credit loan from a credit union and use the funds to pay off debts, reduce other expenses, or make needed repairs.
While unsecured bad credit loans
have high-interest rates, they do have advantages. By taking out one of these loans, you can use the money to repair your credit history, pay off debt, or make needed improvements to your home. Talk to a financial advisor about the different options available.