By Jessica M Peterson
Do you have bad credit but are in need of a personal loan now to help you pay for everything from everyday living expenses in a bad economy to major appliances, and more? If so, you may be hesitant to apply for a personal loan because of your negligent credit history. However, there are many wonderful lending institutions that process loans for a specific group of borrowers, those with bad credit. And you can qualify fast.
What Is A Personal Loan?
A personal loan is a loan that is written out for a non-specific purpose. Most lenders do not ask you what purpose you have when you apply for a personal loan. That makes a personal loan perfect for lots of different needs that you may have. There are two types of personal loans: the unsecured personal loan and the secured personal loan. Let us look at these two types more closely so that you can determine which is best for your situation.
Unsecured Personal Loans For Bad Credit
The unsecured personal loan is a loan that is granted solely on the basis of your signature, and is therefore often referred to as a signature loan. Because the lending institution does not ask you to post or pledge collateral against the value of the loan, the lender is relying on your past payment history when judging your creditworthiness. Because of this, most bad credit borrowers may find it difficult to procure a bad credit loan. You can always improve your chances of getting an unsecured personal loan by asking someone who has better credit than you do to apply with you on your personal loan application. This person is known as a cosigner.
The unsecured personal loan is usually not the right type of loan for the bad credit borrower who does not have a cosigner. If you are approved for an unsecured personal loan with bad credit, be prepared to pay a greatly increased amount of interest in the form of a higher interest rate. This higher interest is assumed because of the greater risk that a lender takes when loaning money to someone who possesses a poor credit record. For those bad credit borrowers who have no collateral and are without the benefit of a willing cosigner, the higher interest is often justified to get the loan that they need.
Secured Personal Loans For Bad Credit
The easiest personal loan for those with damaged credit is the secured personal loan. The secured personal loan is a loan granted based on the borrower’s collateral. The lender will hold surety interest in the collateral that you pledge until you have satisfied the terms and conditions of the lending agreement and repaid them in full. The secured personal loan is the perfect loan for the bad credit borrower because it allows the borrower to rebuild their damaged credit file through monthly payments that fit the budget quite nicely.
Bad credit borrowers should borrow with caution, however; if your payments are late, your lender can force the sale of your collateral to recoup the amount of money extended to you. The interest is much more reasonable on bad credit secured personal loans, making them much more affordable than the unsecured version.
About the Author: Jessica Peterson is an
Bad Credit Unsecured Loan
Consultant with more than twenty years of experience. For more information about
, no credit check loans, guaranteed loans, personal loans, car loans, guaranteed student loans and other financial products please visit http://www.yourloanservices.com