In this troubled economic scenario and irresistible temptation of buying on credit, more numbers of people are falling into the dark dungeon of debts and credit outstanding. However, the perilous market condition has left with only limited money in the hands of people, making them incompetent to pay their debts in a timely manner. The debts keep accumulating, making it more difficult to repay them. The situation is even worse in the Western countries, owing to erroneous buying habits, and that too on credit. As such, more and more people are falling into the category of bad credit history, affecting their credibility of acquiring a loan in future.
People fail to understand the pitfalls of bad credit score unless some emergency financial crisis arises, with the need of a loan. Acquiring a loan with bad credit score is relatively difficult these days. However, there are certain options for bad credit loans, helping with necessary financial assistance in situations of emergency. Getting these bad credit loans is simple because your credit history does not affects the conditions for loan approval; just you need to have a steady flow of income to get an approval for loans in bad credit.
Types of Bad Credit Loans
Discussed below are different lucrative options for bad credit loans:
Secured Personal Loan – This type of bad credit loan is good for people having a personal asset or property that can be pledged as collateral to the lender. The rates of interest are lower in comparison to other bad credit loans.
Unsecured Personal Loan with Co-signer – Unsecured personal loans are most popular forms of bad credit loan, where loan is approved on the guarantee of a co-signer who has an excellent credit score. Here, the co-signer acts as a guarantee to the lender in situation where borrower becomes incompetent to repay the loan. The interest rates are much lower in this type of loan, with flexible loan repayment terms.
Unsecured Personal Loans – This is considered one of the most expensive bad credit loans. Here, no asset collateral or co-signer is present to absorb the unforeseen risks of non-repayment of loan in future. The lender completely trusts on the borrower’s capability to repay the loan on time. As such, the interest rates are exorbitantly higher because the borrower has a bad credit history. Credit cards are a type of unsecured personal loans, often pushing people to the pitfalls of buying in credit.
Payday Loans – Payday loans are easily available, even if the borrower has a poor credit score, and are particularly limited to small loan amounts only, for instance $1, 500. Generally, payday loans get sanctioned within 24 hours of applying for the same, and require the current income proof and salary account number of the borrower as a necessity. The loan amount is deducted from the salary account of the borrower on the next pay day. Elsewhere, post-dated checks are also given by the borrower to repay the loan amount. No credit check is necessary here, and interest rates are generally very high.
Research well about different bad credit loans, and choose the most convenient option for you.