Credit Card

Bad Credit Loans – A Borrower’s Guide to Personal Loans

If you need cash, it might be just what you need to be able to pay your personal loan bills. Many people who need quick cash overlook the personal loan option because they don’t understand how they work. Or they don’t think they can qualify for one of these loans because their credit score is below impressive.

But the reality is that you can find personal loans even if your credit score is very low below 600, or even below 550. There are several types of personal loans to choose from, including secured loans, unsecured loans, and auto title loans. .

Secured loans are where you put a type of collateral – something of monetary value that the lender can easily sell if you can’t repay the loan principal. Because this type of loan is secured, you can expect to pay slightly lower interest rates. Also, your credit score won’t be much of a factor in these loans because putting up collateral helps reduce the lender’s risk in the deal.

Unsecured loans, on the other hand, do not require you to provide any collateral to the lender. That’s fine if you don’t want to put anything of value up for sale later by the lender. But the downside is that you have to pay a higher interest rate on the money you borrow.


A car title loan, meanwhile, is very similar to a secured loan. In fact, it is a type of secured loan. With an auto title loan, you use the value of your vehicle as collateral for the loan. In the case of this type of loan, you risk losing your vehicle. And interest rates can be quite high.

If you can, your best bet among these 3 options is to go with an unsecured loan. Surprisingly, even if you have a low credit score, you should be able to find a bad lender who will lend you the money you need.

The trick to doing this is this: You don’t want to walk through the front door of any ex-personal lender and ask for a loan. Instead, you’ll want to do your homework first. Find a notepad and a pen. Then start looking for personal lenders who make it a point to do business directly with people with low credit (FICO) scores. Get good grades so you know who to call and who offers you the best deals.

You see, bad credit personal lenders won’t nearly hit your credit score like most lenders do. While most lenders will scream when they see a FICO score below 550, a personal lender with bad credit will automatically see this as a challenge to try to meet or beat. By applying directly with them, you will put their wheels in motion to find a way to gain approval.

Last bonus tip: Make sure you don’t limit yourself to only applying to one of these lenders. Instead, refer to at least 3-4 of them. This will increase your chances of getting the best rate.


Leave a Comment