Fast Unsecured Bad Credit Loans

An unsecured loan is simply a loan in which no collateral is put up to secure the loan. In a secured loan a person must have collateral that the lender can seize if the loan is unpaid.

Unsecured loans can be hard to get for people with bad credit because no collateral is involved. Fortunately it is not impossible for a person with bad credit to get an unsecured loan.

Many lenders will loan money to people with bad credit if they can prove they have a regular source of income such as a good job, a pension, a government benefit, an annuity or settlement payment or a business with proven cash flow. These lenders often won’t approve a loan until proof of the income such as a signed statement from a person’s boss or a bank statement is provided.

Credit checks

A big drawback to unsecured loans is that most lenders will run credit checks on people who apply for them.

The credit check may not stop a person from getting the loan but a lender may charge higher interest or apply stricter terms because of bad credit. A history of default or unpaid loans may cause some lenders to turn down some applications.

Don't apply to too many bad credit online loans

Persons who apply for unsecured bad credit loans need to be careful about credit checks. Every time a credit check is run it can appear on your credit statement. To make matters worse running a credit check can cause a credit score to go down.

Those with bad credit should avoid lenders that run credit checks. If it is possible a borrower should ask a lender if they can forgo a credit check. Lenders might do this for people who can demonstrate income or agree to stricter terms.

Higher interest and tougher terms

Those who apply for unsecured loans and have bad credit will probably have to pay higher interest and face stricter terms.  The interest rates and terms for new borrowers with bad credit will be rougher than for lenders with a proven track record of making payments.

Pay off loans quickly

Paying off a loan is a good way to get better terms from a lender in the future. A lender might be willing to overlook a bad credit record, if a person has paid off loans quickly in the past.

A borrower with a proven track maybe able to negotiate better terms or interest from a lender they’ve used in the past.

The first place a borrower with bad credit should look for a fast unsecured loan is lenders they’ve used in the past. Such a lender will be more likely to lend  such a person money because they know the money will get repaid.