Terrible Credit Loans: Easily Get a Loan when Rejected for Credit

Dec 27, 2010
Asa Ghaffar

Very Bad Credit Loans and Credit - Image by YourCarNote

Loans for bad credit are intended for applicants who've been declined due to a terrible credit history. Secured and unsecured options are available.

Cash loans for terrible credit don't come cheap, but they do provide a short-term solution to a genuine financial crisis. When the banks have refused your application and you urgently need a way to pay the bills, this could be the perfect solution. It's not a long-term financial solution.

Depending upon your circumstances, you may be able to get secured or unsecured loans with no credit checks. There's no major difference in the cost of borrowing, but the provision of collateral means guaranteed approval for the applicant. This is because you're minimising the risk for the lender.

Loans for People with Terrible Credit

Pawn shop: Provided that you have some collateral, such as gold or silver, you can get a poor credit rating cash advance from a pawnbroker. They hold onto the item until you've cleared the balance. If you don't pay, you lose the item of value
Payday stores: Subject to state low, you may be able to borrow $1,000 with no collateral or security from a payday lender. You'll normally need to be in full-time work, but some companies may lend you money when you're out of work.
Family loans: If a member of your family is in a better financial position, they may be prepared to lend you some cash to help you to get back on your feet.
Doorstep lenders: UK customers may be able to get an unsecured doorstep cash loan. Once approved, your local agent will collect payments from you on a weekly basis.
Credit card: If you have a charge card from the days when you had a good credit rating, you can make a withdraw for a percentage of your credit limit from an ATM.
Car title: Those who've cleared a minimum of 75% of all outstanding car finance may be able to borrow money against the equity in their vehicle.
Homeowner loans: If you can demonstrate affordability and have sufficient equity in your home, you may be able to get a secured advance against your home.

Peer-to-peer lenders, such as prosper.com, used to lend money to poor credit customers, but this changed following a lawsuit. You'll now need a minimum of a fair credit score to get approval.

Really Bad Credit and the Cost of Borrowing

Given that you've been rejected for credit elsewhere, lending you money is clearly a risky proposition, Let's face it, if a lender didn't think that you were highly likely to default on the agreement, they'd accept you. They don't want bad debt on their balance sheets.

We've established that lending you money carries a risk, so you won't be shocked to discover that the rate you'll pay is going to be high. The majority of terrible credit loans have a monthly interest rate of 25%, but rates do vary between lenders. Always compare costs before entering an agreement.

You'll also find that payday advances and bad credit auto title loans may be restricted by state law. Controls range a from maximum borrowing limit or interest rate to outright prohibition. You'll need to check the law before borrowing money. Ethical lenders will make you aware of where you stand.

Considerations when Getting a Loan

Getting a loan with an adverse credit history is relatively easy, but you should only do so when you're certain that you're going to have the means to repay the debt. Remember that you're effectively spending tomorrow's money today, so will have less money to get by in future months.

Avoid borrowing money for frivolous purchases. Terrible credit loans should only ever be seen as a way of dealing with a genuine financial emergency, such as paying your gas and electricity bill. Don't just get a fast cash advance and fritter the money away on non-essential purchases.