Personal Loans for People with Bad Credit

By: Karen Wardman

There are a number of people who suffer from bad credit score. To improve the credit score one needs to clear the outstanding debts on him. One of the methods is to get a loan. The very first question that arises is that irrespective of their bad credit score can they obtain a loan. The answer is yes, one's bad credit score can't come in the way of availing a loan. And personal loans with bad credit vindicate this in an apt fashion. The only thing you may find a bit harsh is the interest rate which is slightly higher than any other normal loan.

If the loan is availed against collateral then the loan amount that can be obtained is around 125% of the value of the collateral.

This is known as a secured loan where you offer a security for the amount borrowed. Where as in an unsecured form of personal loans with bad credit you do not have to offer a collateral to ask for the loan. You can apply online and your application will be forwarded to the lenders. During the processing of your application, lenders make certain enquiry related to your financial status. For instance your past credit scores, your support income etc. After all these procedures if your application is approved then loan is granted depending on your ability to pay back.

The interest rate with personal loans with bad credit varies from person to person depending on whether the loan is secured or unsecured in nature. For a secured loan interest rate varies from 7.9% APR to 19.9% APR depending on the credit score of the borrower. Where as for an unsecured personal loan it varies from 7.4%APR to 41%APR. Here also your credit score decides your interest rate. Also one must take care of the repayment mode as these loans are availed to improve the credit score if payments are not made in time they can result into ruining your credit score even more.

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