High Risk Personal Loans can be used for anything you need it for. Maybe you need to pay off a irritating debt, get an urgent car repair, make a special purchase or what have you. These bad credit personal loans can provide you with the finances you need for whatever you need.
The great thing is that personal loans for bad credit do exist. The main thing you need to do is clearly establish why you need the loan at this time.
It is not good to take on personal loans just for the sake of it. You should have a clearly defined reason what you need the money for, and exactly how you intend to use it. You also need to know how much you’ll need as well, as how you intend to pay off your loan.
These are called High Risk Personal Loans because lenders take a higher risk lending to individuals with bad credit. (They are also known as bad credit personal loans, bad credit signature loans, and cash advance bad credit.)
These loans will understandably come along with higher interest & fees than if you had good credit. However, keep in mind that if you make on-time payments to repay your loan, this can serve you a great opportunity to rebuild your credit.
Use a high risk personal loan wisely, not only to get the things you need right now, but also to improve your credit profile as well.
Advantages of High Risk Personal Loans
- Typically, No collateral needed
- No co-signer is necessary
- Opportunity to improve your credit
- No lengthy contracts (usually just a few pages or less)
- Get the money you need fast
- Easier to get than bank loans
- Bad credit is not an issue
- Loans can be conveniently direct deposited to your account
Disadvantages of High Risk Personal Loans
- High-end interest & fees
- Could further damage your credit if you default on the loan
- Fairly limited loan amounts (typically a few thousand or less)
Unsecured Personal Loans
An Unsecured Personal Loan does not require any type of collateral. You don’t have to back the loan with any of your personal assets like your house or car. Basically to qualify for an unsecured personal loan, lenders just want to see steady income.
Your stable job or self-employment history and income is your greatest asset when negotiating for this type of loan. Lenders must feel confident that you definitely have the means to repay your loan – No exceptions. Because of the unsecured nature of this subprime loan, it does pose a higher risk to lenders and usually will come along with higher interest & fees.
Secured Personal Loans
As you’ve probably guessed, secured personal loans do involve collateral. This is where you offer to back the loan with assets that you own. It could be backed by anything you have of value i.e. your house, car, jewelry or other.
Since these loans are secured, they pose less risk to lenders and thereby generally have lower interest & fees. By securing the loan, bad credit lenders feel more at ease to lend you the money you need; they know that if you default on the loan, they can liquidate those articles of value and recoup (or offset) their losses.
Be very cautious with this method…because if something happens and you can’t repay the loan as intended, then you could very well lose your personal assets as well as further damage your credit.
Final Note: Be sure to read and understand all details for high risk personal loans. Pay close attention to the small print. Ask questions if you don’t understand something. You need to be fully aware of all details and consequences.