Bad Credit Personal Loans

You, like many people, may experience financial difficulties in your lifetime. If so, you probably still need to buy a car, do home improvements or finance education.

If your credit is poor, who will lend you money? How do you get a loan? What kind of loan can you even get?

Bad credit personal loans are a vehicle where you may be able to secure funds after your credit score has deteriorated.

Types of Bad Credit Personal Loans

While it can be difficult to obtain a loan if you have poor credit, it is still possible. Below are four ways you might be able to secure funding in a bad credit situation:

  • Home equity loans- These might be an option for you. To have a shot at this, you’ll have to making on-time payments on your mortgage. You’ll also have to show that you can repay the loan. To do this, you may have to provide wage statements, tax returns and/or proof of employment.

However, they’re convenient because they free up the equity in your home. In addition, you can borrow at a better rate than an unsecured loan because your home is used as collateral.

Some other advantages of this type of bad credit loan are:

  • It’s designed for people facing credit problems
  • You’ll deal with a bad credit personal loan specialist who understand your situation
  • They can help you repair a negative credit score
  • Financial institutions are becoming more flexible about bad credit personal loan applications in home equity situations

However, you want to be careful here because if you can’t repay for whatever reason, your home could be lost to foreclosure.

  • Cash Advance or Payday Loans- These places ask you to provide you last few pay stubs. Then, they advance a loan based on your paycheck size. While easy to get, the repayments can approach $30 on a $100 loan.
  • Title Loans- If you own a car and it’s in your name, bring it to the loan agency. They will tell you the maximum amount you can borrow based on the car’s value.

These loans carry high interest charges. Also, if you don’t repay the loan, your car will be repossessed.

  • Community Loans- At these websites, you establish an account using your social security number. You credit score is then ranked. Depending on where you fall, you’ll probably secure a loan although it may run at a 20 percent or higher interest rate.

An interesting point about these sites is that users tell the stories about why they need the money. They then pay back the loan. The lenders get their money back plus interest.

There are several sites on the internet where you can apply for and get bad credit personal loans. Many of the loan amounts are low (in many cases, up to $1500) but if you can repay the loans, it can be the beginning of rebuilding your credit history.

 

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