Personal loans are a great way to have access to money for almost any reason such as going on vacation, buying a car or even just to pay off a few debts. However, if you have a bad credit rating then finding a personal loan can seem to be very difficult. Fortunately there are many modern lenders that are offering personal loans for people with bad credit and this means that you can have access to a loan no matter what your credit history is like.
In general these are the two different types of personal loans available. Most lenders will only offer secured loans people with poor credit as this is a less risky option (for the lender). With this type of loan you will be required to provide collateral for the loan in the form of an asset (typically your house or car). Providing collateral for the loan is the best way to be approved, but it is important to remember that your asset will be at risk if you cannot make the payments!
Unsecured personal loans do not require collateral and are therefore much less risky to the borrower (you), but are much harder to be approved for it your credit rating is low. There are some lenders who will offer this type of personal loan, but you will most likely be charged a much higher interest rate together with higher fees and charges.
As there are fewer loan options to choose from when you have a poor credit rating there are some downsides that you should be aware of. It is important to be aware that there are unscrupulous operators that prey on people in desperate situations. This is why it is a good idea to use a reputable lender and always read the terms and conditions!
Due to the fact that you have bad credit there are some penalties that will be placed on you by your lender. These will include a higher than standard interest rate (usually at least 1% extra), extra fees and/or charges. It is also more likely that you will be restricted in the total amount you can borrow.
The best way to find great deals on personal loans is to take some time to research and compare the many different lenders. A good way to do this is to find lenders that are offering personal loans for people with bad credit and compare the different interest rates, fees, charges, terms and conditions. From this you can create a short list of the best lenders and start the application process. This way you will be sure to find a personal loan that suits your needs and offers you the best deal!