Bad Credit - Unsecured

Bad Credit Unsecured Loan
Guaranteed Bad Credit Unsecured Loans

An unsecured loan is simply a loan in which the borrower is not required to put up any collateral. The loan is unsecured because no collateral is involved.

A secured loan is guaranteed by a piece of collateral that the lender can seize if the loan is unpaid. An example of a secured loan is a loan from the pawn broker. In such a loan the pawn broker keeps the collateral until the loan is paid.

Unsecured loans

There are a variety of unsecured loans made to people with bad credit. Many lenders will loan money to those with bad credit records if they can prove they have a source of income such as a job, a business with cash flow, a pension or a government benefit payment.

Instead of a credit check these lenders will usually demand proof of the income such as a pay stub or bank statement.

Where to find unsecured loans

Alternative lenders that make unsecured loans to people and businesses with bad credit abound. Many of these lenders can be found online through the use of search engines such as Google.

Simply typing bad credit loans into a search engine should produce a list of these lenders. Many of them make very fast decisions so the loan can be quickly taken out.  It is often possible to get the money from such a loan in a few days.

Higher interest and tougher terms

Those with bad credit will usually have to pay much higher interest on unsecured loans. The lender is taking more of a risk by loaning to such people so they expect a higher return.

The terms for bad credit loans are often tougher as well. Many bad credit lenders will require the borrower to sign an agreement to pay the loan off very quickly. They may have a rigid loan repayment plan.

Another method used by some lenders is to have the borrower agree to let the lender take the repayment money out of their account electronically. This can reduce paper work but it can tie up funds for months to come.

Hard money loans

One popular kind of loan to people and businesses with bad credit is a hard money loan. This is a direct cash loan made by an investor or company rather than a bank. Hard money lenders will loan to people with bad credit because they are interested in money. To qualify for a hard money loan a person will have to prove they have income or will have income coming in.

Hard money lenders usually don’t loan to individuals unless the individual is involved in some sort of business deal such as purchasing rental real estate.