Bad Cash Credit Loan Unsecured

Many people who have bad credit find themselves in need of emergency cash but are unable to advantage of sources of emergency funding many people rely such as credit cards. In such situations many people take advantage of unsecured cash loans which are also called cash advances or payday loans.

A secured loan is a loan in which collateral is put up to guarantee the loan, a classic example of a secured loan is a loan from the pawn broker. People with bad credit are able to get secured loans because the lender seizes the collateral if the loan is not paid.

An unsecured loan is simply a loan in which no collateral is involved. People with bad credit often have a hard time getting such loans because lenders take a higher risk loaning to them.

Cash loans for people with bad credit

There are some lenders that specialize in making unsecured loans to people with bad credit. Many of these lenders are called cash lenders because they lend cash directly to people who can’t get bank credit or credit cards. These loans are often called cash advances or payday loans.

A payday lender agrees to lend a person a loan on the condition that they pay it back on their next payday, hence the term payday loans. Payday lenders usually require that people have a steady source of income such as a job or government benefit check.

These loans are often called cash loans because they are made in cash at storefronts directly to the borrower. In recent years many of these lenders have been making preloaded credit cards available to borrowers as well.

Bad credit cash loans online

It is now possible and fairly easy for a person with bad credit to get a cash loan or cash advance online. To get such an advance a person is usually required to have a bank account, usually a checking account.

The borrower fills out an application online and submits it. The application includes the routing number and account number of the applicant’s bank account. If the loan is approved the lender electronically deposits the funds borrowed directly into the bank account.

To repay the loan, the borrower agrees to let the lender take the funds needed to repay it out of the bank account on a specific day. These online loans can be fast and convenient and don’t require going to a store front to apply for a loan.

Higher interest and tougher terms

It is generally a good idea to limit the use of unsecured cash loans especially for people with bad credit. Such loans can be easy to get and convenient in the search term but very costly in the long time.

Most payday or cash advance lenders charge high interest and strict terms that usually require the loan to paid off quickly. Many cash lenders will have a repayment period less than two weeks. These lenders will usually extend the loan period if the borrower will pay a fee often $50 or $60 to renew the loan.

It is not uncommon for cash lenders to charge interest rates of up to 20 or 30%. Therefore unsecured cash loans should always be used sparingly.