Until recently, the idea of getting a personal loan with bad credit was a seriously laughable suggestion. Today, however; individuals with bad credit or no credit can take advantage of several lending options. Many of today’s borrowing alternatives offer practical help to those who need cash quickly and have no other means in which to attain the money.

PAYDAY LOANS

• These loans are designed for individuals with poor credit who desire funds quickly. Processing for a payday loan is generally completed within one hour of application and cash is often dispersed upon approval or within 24 hours.
• To qualify for this type of loan, borrowers must be 18 years of age, provide proof of steady income, and have a banking account.
• Repayment is secured through personal check or automatic withdrawal from the borrower’s bank account.
• Most payday loan terms run two weeks and carry extremely high, unfavorable interest rates that can range into the hundreds.

CONSOLIDATION LOANS

• Debt consolidation loans allow borrowers to combine accumulated debt into one convenient, low interest loan.
• These loans are generally unsecured and obtaining one requires proof of good income, verification of debts to be paid, and a signed promissory contract for repayment.
• While consolidation loans are more traditional than payday loans, they still offer higher interest rates for poor credit clients and extend debt payoff length.

CREDIT CARDS

• Some lenders offer secured credit lines for individuals who have suffered financial setbacks.
• These cards often require applicants to pre-load a deposit onto the card. After which, funds can be withdrawn at will.
• Money loaded onto the card earns interest as well as helping to rebuild credit scores.
• To qualify for a bad credit credit card, borrowers will often need to provide proof of good income and show residency history.

When looking for a bad credit personal loan, it is important to research your options and lenders. While many reputable companies are willing to accommodate personal loan needs, there are a large number of businesses who engage in predatory lending practices.

Misleading or altering loan information is a big concern for bad credit borrowers. When faced with a financial crisis, many individuals will often take whatever monies are made available to them.

Don’t be a victim. To be sure that a lender is not using unethical or illegal procedures; keep an eye out for these warning signs:

• Unprincipled companies will ask that you falsify or embellish loan information such as income amounts or debts incurred. This is illegal and your communications with the lender should cease immediately.
• Look at the interest rate. Most cash advance or payday loan specialists elicit exorbitant amounts of interest upon finalization of loan contract. It is not uncommon to see a 400 to 500 percent rate from predatory lenders. These practices are unethical, and are quickly becoming illegal in many states.
• Many unscrupulous lenders may have you to sign forms that are incomplete. Numbers may be missing or altered upon finalization. Hidden fees and unwarranted insurances can also be added without your knowledge, so be sure to read your agreement fully before signing anything.

Obviously, it is better to resolve any negative credit issues before attempting to acquire more or different debt. In reality, this is not always feasible. If a bad credit personal loan is necessary; be very cautious, avoid impulse, and repay the loan as its terms dictate.