Personal loan are a great tool for consumers to finance unexpected expenses like car repairs or large tax bills. However, your credit history isn’t great, but you need a personal loan and you’re afraid you’re going to get rejected when you apply for one. Years ago you made a poor business decision that resulted in having to declare bankruptcy, and although you have been working diligently to regain ground, you still have bad credit.
Although your bad credit is against you, don’t fret. There is a possibility of securing a personal loan even with a bad credit history. Many personal loans are offered on an unsecured basis. With unsecured loans borrowers do not need to offer collateral to secure the loan. In theory, lenders are providing the borrowers with money in good faith. Since these loans don’t always check the borrower’s full credit history, you may be able to secure a small amount. Unsecured loans charge higher than average interest rates since they are a bigger risk to the lender.
Additionally, there are secured personal loan where a borrower will have collateral to help secure the loan. So even if you have bad credit, but you have something of value to back you up (like property) a personal loan may be possible. However, because of your low credit score, your interest rates may be higher. You may also apply for a no credit check personal loan to avoid having your bad credit affect the chances of approval.
When searching for a personal loan with a history of bad credit, it is advised not to take advertisements that have low rate personal loans at face value and read the fine print so that u don’t get caught by surprise. Once you do end up securing a personal loan, you will be able to rebuild your credit. By being responsible and following all the terms to which you agree to, you can slowly move your way back to a higher credit score.