Unsecured Loans with Bad Credit

June 20, 2009
If you need quick access to cash funds but have bad credit and no collateral to offer a lender, don’t despair. You do have options.

As the economy continues to suffer under the strains of recession, fewer lenders are willing to approve unsecured loans to consumers they consider bad credit risks. In fact, the minimum credit score cutoff these days for most banks is 580. These financial institutions naturally assume that since these people have a tendency to default on loans, they're not worth the risk.

There are two principle types of loans for bad credit: secured and unsecured. Secured loans, as the name indicates, are pledged against personal assets such as a car or home. This procedure makes it safer for the bank or lender to loan money because there is something physical to repossess in case of default. Therefore secured loans are much easier to obtain, provided you have good credit and collateral.

Conversely, unsecured loans with bad credit do not require collateral and are perceived as a much higher risk to the lender. In order to offset this risk, the interest rates on unsecured loans are typically much higher than for their secured counterparts. Moreover, the total amount of funds available for an unsecured loan with bad credit is generally much lower, usually $500 to $1000. They also carry stiffer fees. Nevertheless, people with good credit and repayment histories will normally find lenders more willing to loan them money. So, unsecured loans with bad credit are often hard to obtain. But there are options.

Over the years, as more and more people have encountered financial problems that damaged their credit, companies like have stepped forward to offer them assistance. understands that even the best borrowers can have problems that may unfairly prevent them from easily repairing and rebuilding their credit. With programs that offer unsecured loans for consumers with bad credit histories, it suddenly becomes possible to start rebuilding their credit while getting the money they so urgently need.

Even though unsecured loans with bad credit aren't recommended except as a last resort, they are still an excellent way to rebuild credit quickly. Unsecured loans with bad credit will carry significantly higher interest rates and fees. By paying a loan back quickly, however, a borrower can easily boost their credit score so that the next time they need to borrow money, it will be a much easier process. Over the course of time, a person can establish a good re-payment history and thereby become eligible for other types of unsecured loans that have more favorable rates and terms.

Finding unsecured loans for bad credit isn't impossible. In fact, obtaining bad credit unsecured loans from is quite simple. Since there is no credit check or lengthy application process, you can have your money in as little as an hour. So if you have bad credit and just need a little money for bills until payday, or maybe unexpected car repairs have popped up, you can feel confident knowing that has the answers.