Bad Credit...Can You Get A Personal Loan?

Yes, but it's not going to be easy.  A bad credit personal loan is simply a loan granted to individuals like you who have bad credit, regardless of how you managed to get there.  This type of loan may be secured or unsecured.  Your bad credit rating is going to cause you to pay higher interest rates whether it is secured or unsecured; however, the rate will be a lot higher and the chance of obtaining an unsecured loan will be a lot lower. 

So what can you do if you need a loan to repair your roof, or pay for your daughter's wedding and you don't have any collateral --house, vehicle, boat, motorcycle, diamond jewelry, etc.?

Finding A Lender When You Have No Collateral?

If you have a job, then you can probably qualify for a payday loan, but this is not the type of loan to apply for when you need to borrow more than 25% of your paycheck.  You will have to find a lender who specializes in high risk personal loans.  Ok, but how do you go about finding a lender who specializes in bad credit personal loans? 

The best place to look is on the internet.  Luckily, we have already done the research for you. 

If you own a home, then finding a lender will probably not be that difficult.  However, you must have equity in your home in order to qualify for a loan.

You may owe less than the value you of your home, but how much less will determine the loan amount you will be able to borrow.  If you have bad credit, then you will probably only be able to loan up to 80% of the value of your home.  Some companies advertise 125% loan-to-value ratio, but you typically have to have pretty good credit to receive that type of loan (if it is a legitimate, reputable mortgage or financing institution).

So how do you find out if you have any equity in your home? You can search your local newspaper for recent home sales in your neighborhood,  check with realtors in your area, or hire an appraiser to tell you the value of your home.  An appraisal will have to be done to receive a loan, but before you spend $300 - $500 on an appraisal, you should have some idea of what houses in your neighborhood are selling for, and how much your house may be worth.  Try to be conservative in this estimate. You don't want to be overly optimistic only to find you spent an extra $300 dollars for nothing.

Why Would Anyone Ever Apply For A Bad Credit Personal Loan?

Circumstances sometimes call for desperate measures.  You don't want to take on additional debt, but the engine in your 1999 Ford Mustang just blew up.  You have to get to work and walking 20 miles is NOT an option. 

A bad credit loan may also be used to reestablish a good payment history. If you pay off all of your bills, but do nothing to prove your creditworthiness has changed, then you will not be any better off.  And taking out a loan may cost you less than the interest on a credit card would at this stage in your life.

What Are Some Popular Uses of A Bad Credit Personal Loan?

Some of the most popular uses are:

• Home improvements
• Luxury holiday
• Dream car or boat
• Debt Consolidation
• Wedding expenses
• Funeral costs
• Cosmetic Surgery  

but, you can use a (bad credit) personal loan for just about anything (legal) that you want.

Conclusion:

Getting a bad credit personal loan will not be cheap, but if it is your only option, then we suggest figuring out a repayment plan or reconsider the reason for the loan--is it an absolutely necessary expenditure, or can it wait?

It's the middle of September, it's going to start getting cold soon and your air conditioning unit just went kaput.  You may be uncomfortable for a month maybe two, but if it is something that you can live without until next summer, then you should. You'll possibly avoid paying high interest and additional loan payments that you hadn't budgeted into "your get out of debt" plan.