Very Bad Credit Loans

Very bad credit loans can be found if you look hard enough. With an economic recession in full swing, people losing their houses by the neighborhood, and record unemployment rates, it’s no surprise that credit scores have been dropping fast. This is causing a lot of hardship for people looking to get loans with very bad credit.

If you are looking for a very bad credit loan, you basically have two choices. Take out a secured loan from the bank or look at getting a bad credit loan from a subprime lender.

These may not be the most attractive choices, but if you are trying to get a loan with a poor credit score, you don’t have any other choice. Poor credit rating loans are your only choice here unless you can first fix up your credit history.

The first option may appeal to some people. If you are in the position of owning substantial real estate or a home, you can use one of these as collateral for the very bad credit secured loan. Since the loan is backed by your assets, banks won’t look too closely at your credit history. This is because with a home at stake, people are VERY unlikely to default on loan payments. If a person does default, the bank gets some of its investment back. Basically, banks want secured loans because they pose significantly less risk than do unsecured loans. Because secured loans are less risk, it’s possible for you to get lower interest rates than with an unsecured loan.

The other option is to look at getting a very bad credit loan from a bad credit lender. There are indeed lenders for people with very bad credit out there. You can find many bad credit lenders online. These types of loans are basically given out to people with poor credit in exchange for very high interest rates.

Now, despite that fact that you are paying a higher interest rate, you can make sure your interest rate is the lowest one you can find by doing some comparison shopping between online bad credit lenders. Interest rates between very bad credit lenders can be anywhere from 2% over standard loans to over 10%, depending on your credit history.

It’s essential that you focus heavily on improving your credit history. All loan options with poor credit are really subpar options. To get the best interest rates and the most flexible loan terms, you are going to have to have good credit. The better your credit, the less interest you are going to pay. But if you are in the position of needed to get very bad credit loans, you can get them if you need.