You’re in financial distress, and you’ll need a loan to help you get out of it. While the loans are pretty easy to obtain and should be relatively easy for everyone to secure, there is so much information on them from the internet and industry professionals that it can be hard to know which trustworthy sources. This article will reduce confusion surrounding these loans from personal loan companies by sorting through the many different types of companies and websites that offer them and providing information on how they work so that you can make an informed decision about your finances before applying.
When you have no collateral and an unstable job that earns you less than $1000 a month, it’s hard to get a loan from traditional lenders. Indeed, some might even reject your application just based on your income. Bad credit loans offer an alternative to these conventional lenders as they are designed for people in financial distress seeking help. They’re also suitable for people who have little or no income, though this does make the loan riskier for the lender.
There are two types of bad credit loans, which will be discussed in this article. The first of these is the installment loan. This is exactly what it says: you repay the loan in monthly installments. The lender then keeps collateral until you’ve repaid your loan. Once you’ve repaid the total amount, any remaining collateral goes to the lender, and the loan is closed. Many companies offer installment loans, which usually differ in terms of how much they cost and their terms. Still, these are generally reasonably straightforward for most people who want to get a loan fast and easily to obtain a few hundred dollars or a few thousand dollars as needed.
The second type of bad credit loan are safe and secure auto title loans. Unlike installment loans, these types of loans can be long-term, and you do not need to make any payments until you’ve paid off the loan completely. This way, they’re somewhat safer but still easy to obtain. The loan is secured by the car title, meaning that if the vehicle is recovered in a defaulting repayment you will get it back. This kind of loan has no payments until you’ve repaid all the money due on your loan, but unlike installment loans, this reduces your chances of defaulting as the payment risk is entirely with the lender rather than with you.