If you search for “personal loans for bad credit” on Google, you will see that there are many lenders out there that would be willing to extend loans to you, even if you have such a low credit score, or even if you do not have a credit score just yet. But did you know that these lenders offer different product even though their products may be classified as personal loans for bad credit.
So, what are your credit options if you have bad credit. You have a choice between an unsecured loan and a secured loan. If you are wondering what they are, read below to know.
An unsecured loan is a loan that does not require you to present and risk a collateral. Most lenders in this category only require that you present proof of income, with some requiring that you present proof that you’ve been holding your job for at least six months. The good thing about these lenders is that they will never look at your credit score and will lend you money with open arms, so to speak, even if the banks thinks you are too much of a risk. However, lenders of unsecured loans mitigate their risk by charging high-interest rate and lending no more than $1,000 for each loan.
A secured loan, on the other hand, requires that you present a collateral like gold jewelry or the title to your car. Still, there are other lenders of secured loans that offer another type of product called a guarantor loan. With a guarantor loan, you need another person to co-sign a loan with you. If you are unable to repay the loan, the other person will pay it. So, while there is no physical item at risk, you risk your relationships.