If you have experienced job losses, medical bills or other financial challenges, it may be difficult to maintain a good credit rating. With a good credit rating, you can face temporary financial challenges by getting a personal loan from a bank or lending institution. But if you have bad credit, it can be difficult or impossible to get a personal loan from a bank. What can you do to get a bad credit personal loan? You have some options, but you have to be careful.
Secure Credit Cards - A common credit card is a form of unsecured loan. This means that the lender gives you future access to money based solely on your previous credit history. You do not need to add any collateral required for your own capital loan or an auto loan.
But if you have bad credit, you may not be able to get an unsecured loan. As a way to help you build your credit rating, many banks offer secured credit cards. If you are approved for a secure credit card, you must make a cash deposit on your credit card account. You can then use the credit card to make purchases up to the amount of your deposit. Then, when you make your regular monthly payment, it reflects your credit rating.
A secure credit card is not a loan. It is simply a way to create better credit. After a year or so you may be entitled to a regular credit card. But beware - some unscrupulous secured credit card companies charge unreasonable fees.
Payday Loans - If you have a permanent job and quickly need money for an emergency, you can consider a payday loan. This is a short-term short-term loan that is usually obtained from a home loan for housing pay.
Let's say you need to borrow $ 400 today to get your car fixed. Your next payday is in two weeks, and your home salary is $ 1000. The payroll office will ask you for a check in the amount of $ 400 plus interest. The check is after dated two weeks to your next payday. You give them control and go to the office with $ 400 in cash.
On your next payday, cash will cash your check. If your check bounces you may be subject to criminal charges or the lender will agree to roll over your loan until the next payday - for a steep fee.
Payday loans are expensive. The loan charges are calculated per $ 100 borrowed, and usually range from $ 10 to as high as $ 30 per $ 100 borrowed. If you are charged $ 15 per $ 100 borrowed, a 14-day loan of $ 400 will cost you $ 60 in interest. It is an annual percentage rate (APR) of 390%. Think of it - do you really want to pay $ 60 to borrow $ 400 in two weeks? And do not forget that your next paycheck will not be $ 1000 - it will be $ 540, as you will have repayed the loan.
Peer-to-Peer lending - Also called personal-to-person lending, P2P lending or social lending, peer-to-peer lending can be a good option if you have access to a lending group. Originally, peer-to-peer lending was developed by closely linked ethnic groups who trusted each other and may not have had access to traditional banks. With its most basic, the group creates a pool of money that members can take out loans, usually for purposes like a wedding, building a home or starting a small business. The money is then refunded, sometimes with low interest rate.
Traditional group group lending depends on a high level of personal knowledge and trust among the participants. For the public, commercial lending pages are being operated on the Internet and quickly becoming popular. Peer-Peer lending websites can generally help people of all types of credit. Because the individuals borrow the money stands to reap a greater return on their investment when they lend to people with bad credit - you have many who are willing to do that. Peer to peer or social lending becomes a great way to get money without using banks or credit cards.
Getting a personal loan with bad credit can be difficult, but if you take the time and explore all available options, you will certainly find people willing to lend money. As always, be careful because the loans available to people with bad credit generally have higher prices and fees associated with them.