bad credit loansWe constantly hear people asking for bad credit help with personal loan and thus we are responding to this request which has only intensified during the past and current economic crisis.  The economic downturn has forced many companies to lay off their employees in an effort to downsize and cut cost.  This has left many good people jobless whose credit rating is falling as they find it difficult to pay their bills on time while struggling to provide for their family.  Even though many such individuals have been able to secure a job, their credit rating has already been tarnished.

In the past many lender dealt only with people with good credit; however, as mentioned earlier many responsible people have now ended up with poor credit rating.  Since bad credit has become a phenomenon associated with these adverse economic times, many lenders have adjusted their lending policy to help and provide loans for people with bad credit.  Bad credit loans fall into two categories as we shall see below:

Secured loans for people with bad credit – Obviously if you have good credit, securing a loan is not so difficult.  However, when you have poor or no credit history securing a loan becomes more difficult as many lenders consider bad credit individuals as high risk.  Although having a bad credit does not prevent you from borrowing funds, it does make it more difficult and the interest rate associated with these funds will be higher.

One way to ensure that you can borrow funds at a descent interest rate is to secure the funds against collateral.  The collateral can be anything that has value such as land, property, etc.  Many lenders are willing to pay up to a certain percentage of your collateral.  This is a great way of ensuring that you can obtain a favorable loan even if you have bad credit.   Another advantage of a secured personal loan over unsecured loan is the there is no specific limit on the amount you can borrow as the amount you borrow depends on the value of your collateral.  The danger of using collateral to secure a loan is that you must make certain you can pay these funds back as per your agreement or you may end up losing your collateral.

Unsecured personal loans for people with bad credit – As the term specifies, these loans are given out without the need of any collateral and thus they are referred to as unsecured loans.  Having a bad credit and needing unsecured personal loans means that the lender will look at other ways of guaranteeing his/her funds.  Most common types of unsecured loans are payday loans also know as cash advance loans.  Payday loan or cash advance lenders generally require that you have job.  The funds are usually expected to be paid back within two weeks (next payday cycle).  Lenders consider these loans as very high risk since their fund is not backed by any collateral, and thus, the interest rate on these loans are very high.  You should only and only use payday loans for urgent situation such paying urgent medical bills, repairing your car that gets you to work, or if you are behind utility bill payments and at risk of having your hydro/heat disconnected.

Bad credit help is available online and offline to ensure you can secure a personal loan; however, you need to determine which type of loan is right for you.  The best option is always to ask family and friends in order to save you the high cost associated with these bad credit loans.  Also you need to plan ahead to ensure that you can repay these loans back on time; otherwise, you will need to roll them back which could cost you much more and can land you in terrible debt situation.  Many individuals had to go through bankruptcy due to irresponsible borrowing of payday loans.  Therefore, seek financial advice and plan accordingly before taking a bad credit loan.