Currently bad credit unsecured personal loans, if you can get one, are offering pretty decent interest rates. While they’re not the lowest rates in the present economic climate, an average of 12% to 18% is available on most personal loans.

Remember that the 12% to 18% range is for well qualified borrowers. This means that your credit score has to be above 680. If your credit score is below that number and if you’ve missed several bill payments or been late on your payments, you’re not considered a well qualified borrower. You’ll have to settle for a rate closer to the 20% mark or may not be able to get any kind of a personal loan at all.

Fixed Rate Personal Loan

Whatever the rate, if you want a personal a loan with a fixed interest rate consider the following:

• You will only have one interest rate for the life of the loan
• You will one payment for the life a loan
• You will have to take all the money you need at once

Credit Cards

If you decide to take a personal loan on a credit card with a credit limit consider the following:

• You can borrow the money as you need it
• Credit cards offer more convenience and flexibility
• Convenience can be a negative feature, too
• The interest rates will usually be higher
• The interest rates are usually variable
• You can stay in debt longer because you’re only required to make the minimum payment

In general, the more fiscally responsible approach is to get a fixed rate loan. That way you always know you’re making progress each month toward paying down your principal.

Photo via Matti Mattila