Personal Loans Are Available To Those With Bad Credit
Submitted by: I-Newswire
Florida (OPENPRESS) July 20, 2011 - Anytime you approach a lender to apply for a loan, you'll be asked about your credit report. Why? Because the lender wants to know if you're a risk worth taking - in other words, if you get the loan, will you repay it? If you have a good credit score, the lender will assume you'll repay the loan. But if you have a poor credit score, you will very likely be turned down.
If this is the case for you, you may feel you have no options. But there are personal loans for people with bad credit.
If you have bad credit but you're working to rebuild it, you can apply for these types of loans, even if you've been turned down for an unsecured loan recently. The good thing about this type of loan is that unlike a secured personal loan, you don't have to put up any collateral.
The catch? You will have to be vigilant about paying the loan back. Generally, personal loans for those with bad credit have higher interest rates. But if the borrower remains punctual, the interest rate could decrease.
In reality, personal loans for those with bad credit can be great tools for rebuilding your credit. But you'll need to re-establish your credit history before you apply for a personal loan. You can do this by first opening a checking or savings account, if you don't have one already. This will demonstrate to lenders your money management skills.
Another way to get a personal loan for those with bad credit is to get a store credit card. Many stores offer a short-term, 90-day payment system. Or you could consider a secured credit card, which requires at least a 50 percent deposit of the total balance from you. Either of these options can help you rebuild your credit.
However you go about it, getting a personal loan is a great way to pay off bills, consolidate debt, or even pay for emergency or unexpected expenses. Just be sure you read the fine print and think things through before you sign on the dotted line.