It is no secret that personal loans for bad credit can be the easiest way to bury yourself in more debt, even if you have the intention of getting yourself out of debt with these loans. However, there is something you can do so that you are getting the best in personal loans for bad credit.
The first step in the right direction is recognizing that there are actually different types of bad credit debts that you can classify as either secured or unsecured. Secured means that the loan is backed by a collateral or is co-signed by another person. Unsecured means that you do not risk any collateral or relationship, and the lender takes it upon himself to decide whether or not lend you money.
Obviously, there are differences between the two. With secured loans, you get a lower interest rate and a higher loan amount. With unsecured loans, you get the opposite and get a higher interest rate for a lower loan amount.
That said, in order to get the best loans for bad credit, take stock of your possessions first. Is there something that you can use as collateral? If you have a car, you can get a car title loan, and if you have valuable jewelry pieces, you can go to a pawnshop. How much you get in loan amount really depends on the value of your collateral. For car title loans, you could get as much $10,000 depending on the make and model of your car and the lender. In the case of pawnshops, you can get a few hundred dollars depending on the valuation of the jewelry piece you are pawning.
IF you do not have anything, you could ask a relative or a friend to co-sign a guarantor loan with you. Most people think that they have no one, but the truth is that this is only because they never ask. If you have someone you can trust and that person trusts you, go ahead and apply for a guarantor loan. Take note, though, that some lenders require that your guarantor owns a house. Do NOT work with these lenders because there is every chance that they will require to have an interest in the house. There are many lenders out there that do not require the guarantor to be a homeowner.
Still, if you absolutely do not have anything or anyone, or if you simply do not want to risk your possessions and your relationships, then go ahead and apply for an unsecured loan. It is simple enough to find lenders that would be willing to lend you money, just type in “payday loans” or “cash loans”.
Before you apply for a loan, make sure that you do research on how a lender charges in interest rate. Also, find out what the terms and conditions are for borrowing money. How much money can you borrow? The typical payday loan lender will lend you anywhere from $100 to $1,000.