Find Out About Unsecured Bad
Credit Personal Loans
For someone with bad credit, life can be
very difficult at times when dealing with finances.
All of the things that most middle class families take
for granted become difficulties that have to be overcome.
The process of buying a car can be a nightmare, as it
can be very difficult for a person with bad credit to
find financing for a vehicle at a reasonable interest
rate. He often has to go around to many different banks
or credit unions and attempt to convince them that he
is creditworthy enough to be able to pay the loan back.
Likewise, buying a house can be even more difficult,
since a much greater amount of money is on the table
with a mortgage. So imagine what life must be like when
an emergency infusion of cash is needed, and an unsecured
loan is desired.
There are usually only three options for borrowers
that are looking for an unsecured bad credit personal
loan. The first, a personal loan from the borrower's
local bank, requires good credit or a cosigner who will
guarantee the loan in case of default. This is usually
not an option for a person with bad credit, depending
on how bad it really is. Most banks won't even talk
to someone with bad credit, as they have to protect
their assets from people who are more likely to default
on the loan.
The second option is to get a cash advance from the
borrower's credit card. This can be a good option if
the person actually owns a credit card, but often someone
with bad credit will either not have a card, or it will
be maxed out to the point that it won't do any good.
The other problem with this route is that the interest
rates for cash advances from credit card issuers are
usually in the stratosphere, sometimes at double or
even triple the normal interest rate for purchases.
And of course, these advances are added to the end of
the balance, so that the lower interest rate funds are
always paid down first before the cash advance is paid
on, providing the credit card company with even more
interest.
The third option is to apply for a payday loan, which
can be a very good way to get some quick emergency cash.
With a payday loan, the person's next paycheck acts
as the collateral, provided the borrower has a steady
job. These loans are strictly for people who are in
a jam, either caught between paychecks with no money,
or for those who are up against some unforeseen expenses.
The amount that a person can borrow is not a huge amount
of money, but it's often enough to tide the person over
until he/she can get paid again in a week or two. As
the interest rate on this loan type can be rather high,
it is not recommended to use this source of funds all
the time, but it can be a lifesaver in the event of
an emergency.
