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Tuesday, February 23, 2010

High Risk Personal Loans For Bad Credit Borrowers

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High Risk Personal Loans For Bad Credit Borrowers

If you are among those with bad credit, chances are that you have experienced turn down after turn down when seeking out the loan product that you need. In fact, those borrowers with bad credit have become increasingly limited in their options when it comes to borrowing money or establishing lines of credit.


The reason for these continual turn downs is simple: lenders look at your borrowing history and derogatory credit file and judge you unfit to repay them when they extend credit to you. That is where a high risk personal loan comes into play; more and more borrowers are finding the high risk personal loan the right choice to solve their personal credit crunch.

High Risk Personal Loans Without A Credit Check

One high risk personal loan that is commonly written without a credit check is the payday loan or cash advance. These are short term and written therefore for a very short period of time (usually your next pay day).

To apply for this type of loan, you must only prove that you are gainfully employed and that you have an active checking account. You will then be asked to write a post dated check in the amount that you wish to borrow, plus interest and some fees. When the due date for the payday loan arrives, the payday lender will either deposit the check into the bank for payment, or you will return to the lending institution to pick up the check and pay the amount owed.

While these products are expensive in terms of the interest that you must pay to receive funding, they are very easy to get and provide a great means for those who are in the market for a high risk personal loan because they have poor credit.

High Risk Personal Loans Secured By Collateral

Another type of high risk personal loan is the secured version. A secured personal loan is one that is backed up by you pledging collateral that will cover the risk that the lender assumes when credit is extended to you or money is loaned to you. Collateral can be any type of real property that is valued at least as much as the money you borrow.

Some examples of collateral that is acceptable with many lending institutions is your home, jewelry, car, electronics, and other items. Keep in mind that your items are subject to a forced sale if you default on it.

High Risk Personal Loans Secured By Signature

A third type of high risk personal loan is the unsecured or signature version. This type of loan is not backed up by any collateral, so the lender assumes a greater risk when dealing with you. For this reason, the unsecured or signature version is more expensive in terms of interest, and may be available to a smaller group of borrowers. You may also be required to apply for a secured personal loan alongside a cosigner who has a good credit rating.

Kate Ross has a Master in Finance and has been a university teacher as well as a financial consultant for years. She specializes in Unsecured Loans and also in helping people to get approved for Guaranteed Loans for Bad Credit, mortgages, guaranteed loans, bad credit auto loans, guaranteed credit cards among many other financial products. For further information, please visit SpeedyBadCreditLoans.com





High Risk Personal Loan

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