Finding the Right Bad Credit Loan

If you have had a less-than-perfect financial history, perhaps your credit score isn’t the best. Many people who cannot qualify for traditional loans look for a bad credit loan to solve their financial emergencies. While most lenders run a credit check before extending credit or issuing you a new credit card, some companies specialize in bad credit loans and offer loans to people who have no credit or poor credit.

Bad credit personal loans might include:
-payday loans
-cash advances
-secured loans
-secured credit cards

Payday loans are usually offered for two-week periods, based on a person’s employment and possession of an active checking account. If you have a job, this type of loan is not difficult to obtain, as no credit-check is run. However, the fees and interest rates for a payday loan can be very high. But many people reason that they are lower than the bounced check fees, late fees, or other financial consequences that may come if the money is not immediately secured. Interest rates for payday loans are typically 15-30% of the loan amount, or approximately 390-670% APR. Since rates and fees vary, it makes sense to shop around and obtain a loan from the lender with the lowest fees.

Cash advances might refer to payday-type loans, or to money withdrawn from a line of credit with a credit card. There is a fee associated with both types of cash advances, but the fee is generally lower if you use a credit card.

If you have no job, a payday lender may offer you a secured loan based upon you being willing to forfeit some possession of worth– something that might be possessed and pawned upon your inability to pay back the loan amount.

Secured credit cards or “bad credit” credit cards are also offered to those with bad credit, but more as a way to improve your credit than a means to obtaining an instant source of cash. This is because you must secure the credit card with a deposit into a savings account. The amount you deposit, less fees, becomes your credit limit.


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