Personal Loan for Bad Credit: a Perfect Financial Panacea

What is the first thing noticed by the lender when you apply for the bank loan? Yes it’s the credit score. Being a good creditor is always helpful from both the lender’s and borrower’s perspective. But what about the bad credit history people? Their application is often rejected. The reason being their poor credit score and no lender wants to risk hisher money. Personal loan for bad credit is specifically designed to sort out thr monetary woes of such persons.

Brief review

Personal loan for bad credit helps you to fetch a decent amount as loan even if your credit score is poor. This loan can be applied by any individuals like homeowners, tenants etc. The personal loans can be applied in two ways-secured personal loans and unsecured personal loans. In secured personal loans the applicant has to keep some collateral to achieve loan and he will get a loan amount of 125% the value of the collateral kept. The other interesting features being lesser rate of interest, longer repayment tenure etc. While in unsecured personal loans the applicant should not keep any collateral for obtaining loan. The process here is very fast since there will not be any property verification procedures. Since here the collateral is absent and the lender’s money is at risk the rate of interest charged is higher.

Rate of interest and repayment tenure

Normal rates are between 7.9% APR to 41% APR. For the secured personal loan the rate of interest charged is between 7.9% APR variable to 19.9% APR variable and for unsecured personal loan it is between 7.4% Apr variable to 41% APR variable. This rate also depends mainly on the credit score of the applicant. The repayment tenure is normally longer one and depends mainly on the amount of money taken. Timely repayments will help the credit score to improve hence better for the borrower.

By: Christian Phelps

personal loan

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