For people with a bad personal credit rating, it is much more difficult to obtain an unsecured loan than it would be for someone with a good credit rating. An unsecured loan is one that is made without anything to guarantee that the loan will be paid back. For example, a secured loan is one that is made with the understanding that if payments aren’t made on the car, the car will be repossessed. An unsecured loan would probably be a personal loan of some type.
If your personal credit rating is bad, you are in the same boat as some other people, but getting an unsecured loan isn’t necessarily out of the question. There are some companies who specialize in getting unsecured loans for people with a bad personal credit rating. They are experts in finding lenders who are willing to take a change on people just like you and helping you get the credit that you need.
The downfall in getting an unsecured loan with a personal bad credit rating is that your interest rate is probably going to be exorbitant. Often, it will fall into the double digit range and can be as high as twenty percent! While there is a certain amount of regulation that applies to loans like these, many companies can get away with it through certain loopholes in the government’s guidelines.
People with bad personal credit are often the ones that need the unsecured loans. One couple we read about had six children and were desperately trying to find a place to live rather than resort to a shelter. They had bad credit and couldn’t get a home loan. They found a trailer that was for sale by owner but couldn’t get a bank loan even with the trailer as collateral. So they went to one of the company’s as described above and got an unsecured loan at 19 percent interest to pay for their $3,000 trailer. They had a place to live, but they also had a huge debt to pay that just kept getting bigger and bigger.
It’s is unfortunate that there are people who have found themselves with a personal bad credit rating ñ especially when they are in need of an unsecured loan like the people described above. But that bad credit rating came about due to personal irresponsibility which is why we urge people to use credit wisely and keep your credit rating in a good spot lest you find yourself in trouble.