There are times when your money may not be able to cover all the expenses that you need to pay for. Worst, when your money falls short just when you are facing an emergency situation where having financial resources on hand is vital. When this happens, the only thing you may only be able to do is to apply for a personal loan in order to let ends meet.
When you talk about personal loans, most lending companies and the bank will try to look at your credit history before giving you an approval. If you have an excellent credit history, then you may have a higher chance of getting a loan approved. However, most lending firms and banks may not show any interest in giving you a personal loan if you have a bad credit rating.
Having a bad credit will decrease your chances of getting a loan, but this wouldn’t mean that it would be impossible to do so. There are lending firms that can offer you with no credit check loans, which is ideal for people who have bad credit rating.
Before signing a contract with a lending firm or with the bank, you may want to think over a few things. The first thing that you need to consider is what type of personal loan you are going to get. There are two types of personal loan that you may consider getting, it could either be a secured or an unsecured one. Each one has its own advantages and downsides that you need to weigh first.
Secured personal loans
Whether you are getting a secured personal loan while having a good credit history or if you are getting a secured bad credit personal loan, a secured loan will require you to have a property of yours to be used as collateral. This most often comes in the form of your house, car or even your savings account.
This type of loan can be approved faster than getting an unsecured loan, since the lenders are not facing great risks of losing money since they can claim your property to cover your debt if ever you default your payment. On the other hand, you as a borrower will have to face a greater risk of losing your house, car or any other property that was set as collateral. So unless you are confident that you will be able to pay your bills on time, you should think it through first before getting this kind of loan.
Unsecured personal loans
When you opt to get an unsecured loan, it may take some time before you can get an approval, which is dependent to your credit history. Although there are lenders that will offer no credit check unsecured loans, you will have to qualify in order to get such loan. The amount that you will be able to get is also depends on your credit rating and your ability to pay. Because the lender is the one facing much greater risks in terms of loss when you will default your payment, this type of loan often has a higher interest rate.