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Poor Credit Personal Loan

Many people with poor credit end up getting a personal loan because cash loans are one of the easiest kinds of loans for people with poor credit to get.

Personal loan lenders are willing to make loans to people with poor credit because of the high profit involved. Poor credit personal loans are short term loans that come with high interest and stiff fees. They are easy to get and convenient but are often very expensive.

Many poor credit personal loan lenders target people with poor credit because those individuals can’t get more traditional forms of credit such as credit cards and bank loans. Poor credit personal loan lenders will also lend to people with low incomes and no bank accounts.

No Credit Score Required

Lenders are willing to make personal loans to people with poor credit because of the way personal loans work. A poor credit personal loan is an advance of an amount of cash to an individual who has demonstrated that they can pay off the loan.

Instead of a credit score, most personal loan lenders look at a borrower’s ability to repay the loan. The personal loan lender will ask for income verification such as pay stubs, bank statements or an employer’s phone number. Many poor credit personal loan lenders won’t advance money until the borrower’s income has been verified.

Such lenders are sometimes called hard money lenders because they are interested in hard money rather than credit scores. Hard consists of funds a person actually has or can lay their hands on in the near future.

Those who are seeking a personal loan should bring income verification documents with them when they apply. Many online bad credit personal loan lenders will require a borrower to fax or e-mail verification before making the loan.

Alternatives to Poor Credit Personal Loans

A poor credit personal loan usually comes with very high interest rates and excessive fees attached. This means that a person with bad credit should look into other alternatives before getting one of these loans.

Poor credit personal loans are not the only kind of loan available to people with poor credit. Pawn shops will loan money to anybody who can produce collateral. Individuals who have tools, jewelry, electronics, guns and other items that they can pawn might look into getting a pawn loan. A big advantage to a pawn loan is that the borrower won’t be harassed by a debt collector if they can’t repay it.

Some pawn shops will also take automobiles and other vehicles or car titles as collateral for a loan. To pawn a car a person will have to own the vehicle outright. If you’re making payments on a car you don’t hold title to the vehicle and can’t pawn it.

Persons who own their homes or real estate can also take advantage of real estate equity loans. If you have equity in a home or land, a lender might advance credit to you even if you have bad credit. Those with bad credit will pay a higher interest rate on an equity loan.

Be Careful With Poor Credit Personal Loans

A poor credit personal loan can be very expensive. Persons who have bad credit should only take out a personal loan if they know that they will be able to pay it off.

If you have any doubts about whether you can pay off a poor credit personal loan, don’t take one out. The grief you can cause yourself by doing so simply isn’t worth the money you’ll get.