Finding a personal loan when you have bad credit can be extremely frustrating at times. Especially when you may not have a job, a checking account, or even collateral to use as an asset for that matter. There are many dangers to watch out for when you begin searching online for a lender. You obviously must avoid loan sharks. This group of lenders have been known to be very dangerous if repayment is not made. Not only that, but there are no rules and regulations to govern this provider…or protect you for that matter. For this reason, we have decided to list loan options that are much safer for people with bad credit. The following is a list of different types of lenders that can help you legally and financially. The main thing a borrower needs to check is the interest rate, the repayment terms, and whether the financial company is licensed.
Bad Credit Personal Loan Options
Option #1 – Payday Loans
If you are in a desperate financial situation and need less than $2,500…then a payday loan will most likely suit your needs. Not just any payday loan will do however.
You need to ensure that you check the following things before you sign a note with a lender:
- What is the lender’s APR?
- What are the repayment terms? (Do I have to pay back in a 30, 60, 90 days or more…the longer the better)
- Is the lender licensed with the correct government and regulatory officials? (this is a MUST)
- Does the lender have a physical address for their company?
- What kind of reviews does the lender have online? Are people satisfied with this lender?
These are questions you must ask yourself and act on if you want a safe loan with little hassle. The worst thing you can possibly do is go with the first lender you run across. It’s imperative that you compare the lenders APR, repayment terms, and license status. For instance, there are numerous loan sharks running unregulated in the UK (as well as the U.S) that are drowning people in debt and fear. If you run across a payday lender that IS licensed, yet charges extremely high interest rates, then this lender could be viewed as a legal loan shark.
Option #2 – Debt Consolidation Loans
If you already have numerous loans out, then adding another one to the mix would be just plain irresponsible. What you CAN do instead, is research debt consolidation loans further. This is one single loan to pay off all other loans. Therefore, all of your debtors would be paid off, with the exception of the new debt consolidation loan. The company you choose to go with will contact all of your debtors and pay them off, leaving you with one payment to make every month. Many people who are bombarded with debt collectors calling them find this option to be well worth it. Many people have their likes and dislikes about it however. Many claim that the interest rate charged is ridiculously high. It really all depends on who you decide to give your business to. It’s a must that you research the lender thoroughly to ensure that you are getting the best debt consolidation loan possible. Remember to check that the company is licensed with your local government as well. The last thing you need is an unregulated lender breathing down your neck if you can’t pay.
Option #3 – Borrow From Family or Friends
If you haven’t asked already, try borrowing the money you need from family or friends. You never know. They could be in a situation to help a family member or friend out. Chances are though, that this will be unlikely as someone with bad credit usually does not know many people with good credit. It’s statistically proven that you have to go through 7 people with bad credit before you’ll find someone with a decent credit score or solid financial credit history.