If you don’t have good credit. you may still qualify for a bad credit personal loan. However, these debt products can be costly. Before you take out a loan, make sure that it is the best option to support your long-term financial success.
What is a bad credit loan?
A bad credit loan is a type of personal loan that caters to borrowers with lower credit scores. Many banks, credit unions and online lenders offer these loan products. They generally come with a fixed interest rate and are payable in equal monthly installments.
There are no restrictions on how the funds can be used. Some borrowers take out bad credit loans to cover a financial emergency, pay medical bills or consolidate debt. Others use the loan proceeds to cover larger purchases or make home improvements.
Bad credit loans are either unsecured or secured. The latter is backed by collateral, like a car or home, that your lender can seize if you fall behind on payments.
Who may want to consider a bad credit loan?
If you need fast cash and can’t get approved for a traditional loan, a bad credit loan may be worth considering. You could pay several hundred or thousands of dollars more in interest. Still, the rate is usually far less than payday lenders charge, and some lenders offer same or next-day funding.
A secured loan is a good fit for borrowers who are confident that they can make the loan payments on time. These are ideal for people who have something to use for collateral and could benefit from the lower…
