In the United States a credit score is used for a wide range of different monitoring and assessment practices. This includes using your credit score to evaluate your ability to buy a vehicle, take out a mortgage, rent, find a job or apply for a credit card or loan. For people with credit problems, the idea of personal loans for bad credit may seem impossible, but it is really a very real option.
Credit Information of Interest
It may be surprising to find out that the average credit score in the United States is only 693, which fits into the category of prime credit scores. However, there are 61 million people that have scores between 500-649, which are considered to be subprime. These are the people that may find that they aren’t able to get a standard loan, but they will still be eligible for personal loans for bad credit.
What about Collateral?
Collateral is typically required when you go to a bank to get a loan. It is the actual physical property that the bank puts a lien on to protect their investment. If you default on the loan, the bank then has legal ownership of your property. Typically collateral includes large items such as motor vehicles, luxury boats, specialized equipment and actual real estate.
Personal loans for bad credit don’t require collateral because they are not designed to be large loans that are paid out over time. Instead they are loans that can be used in emergency situations to get you through to payday without having to go to the bank and take out a large loan or simply try to get buy if you can’t qualify.
How Does It Work?
Personal loans for bad credit use your job as verification of your ability to repay the job. This means that you do have to have a work record of at least 90 days prior to the loan, and you have to earn a minimum gross pay per month of at least $1000.
You will pay a flat fee on personal loans for bad credit, and you will not pay any additional interest, fees or charges as long as the loan is paid off on time. In some states the loan can be extended, but there will be additional fees to consider. If you need personal loans for bad credit we can help.