Two types of loans are available:
- Secured loan :
A secured loan requires something of significant value as collateral for the loan, e.g. your house. These factors a lender will determine for the loan:
- your credit score
- your overall debt load
- the value of your house or car
- Un-secured loan:
A un-secured loan does not require any collateral against the loan and is at great risk of losing money for the lender. The interest rate is much higher than the interest of a secured loan.
There are lenders specialized in un-secured bad credit personal loan.
Interest rates on bad credit personal loans are influenced by factors like collateral.
Without any collateral like a house or a car a the interest rate of a bad credit personal is higher.
A secured bad credit personal loan are generally easier to arrange and are likely to have lower interest rates, often even lower than some unsecured debts. The interest rates offered can be less if the property you are providing exceeds the loan amount.
Bad credit personal loans interest rates are higher than standard mortgages but may not be always the case for a secured bad credit personal loan.
How to get a Personal Loan with Bad Credit?
There are many sources for a bad credit personal loan. Just because you have an uneven income stream or some blemishes on your credit report should not disqualify you in getting good rates for personal loans.