When you have horrible credit and need a loan, you may think that you have no options. You do have a few options, other than taking on a second job or selling unneeded possessions. Those with poor credit often seek out alternative methods for obtaining cash in emergency situations, and when major expenses are not in the budget.
Unsecured High-Interest Loan
There are a few companies online that those with horrible credit can apply for personal loans with. The average interest rate on these unsecured loans is 20-percent. Some companies offer loans as low as 9.95-percent interest with flexible repayment terms. It is best to ensure that the company is authorized to make loans to residents of your state. Some states prohibit online loan institutions.
A short-term loan is also good option for bad credit. You can get a personal loans without a credit check even with bad credit if the amount is small enough. These loans are based upon your income and are often repaid on your next pay date and must be paid in-full in one, single payment. A personal loan often has high interest and administrative fees associated with it. To apply for a personal loan, you must provide a blank check to a valid checking account in your name, pay stubs and other personal identification information.
If you default on this type of loan, criminal charges can be brought against you. The check will be deposited into your bank, and you will be subject to subsequent fees from the financial institutions involved.
If your credit is so bad that you cannot obtain a high-interest loan with a high-risk loan agency, consider speaking with a friend, independent philanthropist or family member for a private loan. The terms of this loan would be agreed upon by all of the parties involved. Any contracts made between the parties should be notarized. Notarized agreements can be upheld in court should you default on payments.
Auto Title Loan
If you own your vehicle and are no longer making payments, you may want to consider an auto title loan. With this type of loan, the amount that you can borrow is based on the value of your vehicle. The loan agency will inspect your vehicle and determine its value based upon current markets. You will be offered an amount based upon that value.
You must provide a clear title to the auto title loan company, which they will hold possession of until the loan is paid in full. You are able to keep your vehicle and use it as long as your payments are made. The loan company can take possession of your vehicle, legally, if you default on payments.
Just because you have less than perfect credit, it does not mean that you are stuck when emergencies come up and need cash. You do have options, you are just likely to pay a lot more in interest and fees. It is best to work on your credit by paying off small items first and moving toward larger balances. Making payment arrangements and keeping them, with creditors, does help improve your credit payment history.