Very Bad Credit Unsecured Loans

Many people with very bad credit think that they can only take out secured loans such as pawn loans. This is not true because there are lenders that make unsecured loans to persons with very bad credit. Unfortunately, these lenders usually charge high interest rates and put very strict terms on their loans.

An unsecured loan is a loan that isn’t backed by collateral. The lender relies not on the collateral but the borrower’s good willingness to pay off the loan. People with very bad credit often have a very bad time getting unsecured loans because they may have a history of late payments or unpaid loans.

Some lenders will make loans to people with very bad credit because they are able to charge higher interest rates on such loans. Another reason some lenders prefer loaning to people with very bad credit is that they can make the terms of the loan very short. This increases the profit that these lenders can make from the loans.

Getting an unsecured loan with bad credit

Most of the lenders that make loans to people with very bad credit require borrowers to have a verifiable source of income such as a job or government benefit. Many of these lenders will want documentation of the income in the form of bank statements or pay stubs. Most of these lenders will not require a credit check if a person can present proof of income.

Strict terms for borrowers with very bad credit

Lenders will often put very strict terms on unsecured loans made to people with very bad credit. They may require the loan to be paid back quickly or the borrower to sign an installment requirement plan obligating them to make payments on a regular basis.

One way that many lenders ensure repayment of such loans is to sign an agreement allowing them to take the loan payments directly out of a borrowers’ bank account. The borrower is expected to have the money in the bank account on a specific date.

Unsecured loans with very bad credit online

The best place to find lenders that will make unsecured loans to people with very bad credit is online. There are hundreds of lenders that make such loans and the borrowing process is usually simple and straight forward. The borrower fills out a simple form that is transmitted instantly to the lender. The lender approves the loan and sends out the money electronically.

Persons will have to have a bank account to get such loans because the lenders usually deposit the money in the borrower’s bank account electronically. The lenders usually take the repayment amount out of the bank account electronically. One advantage to such loans is that the borrower can receive the funds within 24 hours of applying for the loan. A disadvantage with these loans is that they will have to be paid back quickly.