Options for Personal Bad Credit Loans

It's important to understand that there isn't a limited market for personal bad credit loans. Most companies have tightened their loan requirements since the recession began in 2007, so depending on the financial hole you find yourself in, it may even be virtually impossible to find a lender willing to offer personal bad credit loans. Here are some places to consider, in your search for a bad credit loan:

• Family members. Let's face it, getting a loan when your personal financial situation isn't very good as can be a daunting task. Everyone's personal situation is different, but it would be a shame to allow pride to stop you from getting a loan from someone you know or love because there's no guarantee you'll find any personal bad credit loans.
• Credit union. Even if you aren't currently saving any money with the credit union at work, getting accepted for personal bad credit loans can be much easier at a credit union, where you have some sort of relationship, than with a lender who only knows the credit scores and other figures that you represent. Credit unions also feel more comfortable offering personal loans because they can have the weekly or monthly loan deduction taken straight out of your paycheck. So even if you want to mismanage your money, the credit union would be guaranteed its payment as long as you retained a job at the company.
• Local bank. Just as a credit union makes sense because you have a personal relationship, it's also a good idea to see if the bank where you have your account or accounts is also a place that is likely to try harder to qualify you for a personal bad credit loan. You'll still need the right credit score and financial record to qualify, but a bank might allow some leeway that other lenders would not.
• Peer lending groups. There are several out there that offer limited personal bad credit loans. While you don't need a sparkling 750 credit score, there usually is a cutoff somewhere in the mid 600s. Also, the top amount allowed often is $25,000 and loans may be restricted to no more than 3 years. The idea is that an individual puts out an application in front of others in the lending group and suggests an interest rate. Others can buy a piece of the loan at that interest rate or wait for a more attractive rate. If enough people buy small pieces of the loan that it equals the entire amount to be borrowed, then the borrower gets his or her money. The investors get their percentage of the payments plus the agreed-upon interest rate.
• Title loans. Many people looking for personal bad credit loans consider title loans because the element of bad credit isn't an issue. You offer up title to property - often a car - in exchange for a loan. The rates, however, can be quite high and it's important to read the fine print to understand exactly what happens if you are late or miss a single payment. These are dangerous loans because it is easy to lose your property by failing to meet the obligations of the loan.
• Payday loans. Often a last resort for people seeking personal bad credit loans. These are generally emergency loans for smaller amounts - $2,500 or less. The loan period often stretches from one paycheck to another, or as short as a week. If you don't repay the loan with interest in that period, another chunk of interest is added to the loan and then you have another week to pay everything off. Interest rates can reach 500 percent or higher, which is why most financial experts strongly recommend against payday loans.