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Bad Credit Unsecured Personal Loan

One financing option that many people are turning to these days is a bad credit unsecured personal loan.

A personal loan or a cash advance is a direct payment of cash made to a person who agrees to pay the loan or advance off very quickly. An unsecured loan is simply a loan in which collateral is put up to guarantee the loan. In a secured loan, the borrower puts up collateral which the lender takes if the loan is not paid off. The advantage to unsecured loans is that a person doesn’t need collateral to get them.

Lenders will make bad credit unsecured personal loans to almost anyone because such loans can be paid off very quickly. Lenders are also able to charge high interest rates on unsecured online cash loans.

Applying for bad credit unsecured personal loans

It is very easy to apply for bad credit unsecured personal loan online. Most online lenders have a simple form that is very easy to fill out. Once the form is filled out and submitted approval usually only takes a few minutes.

The major requirements for most online cash loans are that a person has a bank account and a verifiable source of income such as a job. Many lenders will also accept government benefit payments such as unemployment insurance as an income source.

The lender needs the bank account because they will deposit the funds into it electronically. Most of these lenders will require a borrower to sign an agreement that states they can electronically withdraw the loan repayment amount from this account on a certain date. The borrower agrees to have the money in the account on that date. Cash loans can usually be extended if the borrower agrees to pay a fee for that privilege.

Some drawbacks for bad credit unsecured personal loans

The biggest drawback to bad credit unsecured personal loans is the high amounts of interest usually charged on such loans. Lenders can afford to make such loans to people with bad credit because of the high interest rates that they charge on them. Some online cash lenders can charge interest rates as high as 30% or more.

Another drawback to bad credit unsecured personal loans is that they have to be paid back very quickly. Most of these loans have to be paid off within two or three weeks. Lenders will extend the payback period but they will usually charge a fee for doing that.

Advantages to bad credit unsecured personal loans

The biggest advantage to bad credit unsecured personal is the speed at which they can be made. A person can apply for a cash loan online and have it approved within a few minutes. The money can be electronically paid into a bank account within 24 hours or less. This makes bad credit unsecured personal loans a perfect means of emergency financing for people with bad credit.