#personal loans bad credit
Your loan options
So if you need a bad-credit personal loan, you have two choices:
1. A secured loan
Secured loans are a type of debt where the borrower guarantees some sort of asset, like property, a car or even stocks to ensure repayment of the loan. The loan largely relies on the value of the collateral and not your credit rating, assuring the lender that if you default, they still get a return on their investment. So if you can offer collateral, a bad-credit personal loan is not impossible.
2. An unsecured, bad-credit personal loan
What if you don t have collateral to put up? If so, then an unsecured bad-credit personal loan is for you. It can be a thorny situation to be in because without collateral, lenders do not have tangible assurance that you would repay the loan. However, it s not impossible.
Your to-do list:
1. If you have collateral to offer, then the first step is clear: It s time to look for your lender. Remember to research on several options and not just one. Don t limit your search to banks as credit unions provide a good alternative.
2. If you don t have collateral to offer, you need to look at the non-traditional kind of lenders, which are commonly found online. You can start your search with bad credit personal loans or bad credit lenders . Each lender will have a different set of requirements and stipulations for their loans so study these carefully.
a. Take note that the internet is also home to many con artists. Ask the Australian Competition and Consumer Commission about your potential lender before pushing through. You can also research on the lender s background and reputation by visiting online lending forums and asking other borrowers about their experiences.
3. Study the ins and outs of your loan. Your bad credit score will affect not only the interest but other fees as well.
a. Compute if you can afford to pay for the loan in the first place. Add up your monthly expenses and subtract this from your monthly income. From this figure, deduct your budget for variable costs like entertainment or car repairs. What you have left is the monthly amount you can use for your loan s monthly payments.
As you can see, finding a bad-credit personal loan online can actually be done. Just make sure that before you do jump into it, you are ready for the responsibilities that it involves. If and when you finally do complete repayment, this bad-credit personal loan can actually improve your credit score. Simply remember to make your payments on time