If you are in need of a quick fix with your finances but have poor credit, you may want to look into small bad credit loans. These loans can offer you short-term help, while helping bump up your credit score a few notches.
Taking your bad credit into account, the banks will most likely turn you down. This is most likely because you do not meet their criteria. This can become very discouraging, and leave you with a feeling of nowhere to turn. There is help however, and it is there for those that see no other alternatives.
Knowing What Type Of loan You Need
Before you start searching for a loan, it is best to determine exactly what type of loan you need. If you are looking for a larger sum, you may need to go with a secured loan. This will allow you to borrow a large amount, as you will place security on the loan by way of collateral. If you are looking for a smaller amount to borrow, then small bad credit loans may be exactly what you need.
Depending on the damage to your credit score, you may or may not be required to leave collateral. With a lower amount borrowed however, more than likely they will not ask for the security on the loan. These loans can range in the hundreds to a few thousand dollars. Knowing exactly how much you need to borrow, and for the length of time you need to pay it back to the lender will help you narrow your search down considerably.
When lenders review your application for small bad credit loans, the first thing that they take into consideration is your credit rating itself. Knowing what type of risk you may pose to them, will determine what amount you will be able to borrow. This will also apply to the interest rates applied to the loan as well. While the rates may be very competitive across the board, not every person has the same set of circumstances. Those with very poor credit will undoubtedly have much higher rates attached to their loan, than someone with a few small tarnished areas. Finding the lowest rates available is not really a difficult task. By doing a simple search online at the various lenders, you can get a sense of what the rates are and who is offering the best rate for your situation.
While finding small bad credit loans may not be difficult, you still need to remember to pay the loan back as described in the terms and conditions of the contract. Should you fail to meet the guidelines set out by the lender, you will in fact default on the loan. At this point, you will be advised to come up with the money to pay back the lender, or they will seek legal action against you in court.
If you were asked to give collateral prior to getting the loan approval, you will then loose that collateral to the lender to pay back the balance of the loan funds remaining. Not only is this poor practice, it will further damage your credit and make any subsequent loans in the future near impossible to obtain.