If you have bad credit, you know that it is going to haunt you for years! Any past complications that have caused your score to drop will be reflected on your credit report for up to seven years. Also, if you happened to file bankruptcy it will stay on your report for ten years. During this period of time, this person will find it extremely difficult to get any type of credit including an unsecured loan, a credit card, or even a secured loan.
With that being said, it is important to know that there are actually guaranteed personal loans for people with bad credit, or no credit at all. This type of funding is usually called a “payday loan.” But be aware that they will not be ideal for everyone. First, they generally contain a very high interest rate. Also, more often than not the borrower will have to repay the debt in full by the time they receive their next paycheck, usually only two weeks.
However, there will be no requirements on how the borrower is to spend these funds. Though it seems the individuals who do choose to take on this debt only do so as a last resort. Whether it be an overdue mortgage payment, car maintenance, child care, groceries, etc, there’s no limits on what this money is to be used for. But it is not to be taken for granted, because it will be repaid in full along with interest on your very next paycheck.
Another problem that you may face when you are dealing with a personal loan is that in some rare occasions the lender may require a co-signer (this will depend on the lending institution’s requirements). The bank may guarantee the loan, but they may require a co-signer in order to process the paperwork. While this may not seem like a guaranteed personal loan, it is simply another method for the bank to make certain that the risk they are taking is minimized. Bad credit is a giant red flag, even if you are a good customer. Sure, you might be completely reformed now, and able to make payments on time. However, if your past records prove you have not been responsible managing your expenses, the bank is not going to ignore that fact.
But, for the typical payday loan lender their application process will be easy and shouldn’t take longer then an hour to complete. There is no need to pull a credit report since most people who take on these loans have bad credit or none at all. Although, the lending institutions will make sure the borrower is at least eighteen years or older and can provide proof they are employed.
Please be very careful when deciding whether or not to take on this type of loan. Only do so if you are 100% sure you are going to have the money to repay the funds you borrowed by your next paycheck. If this does not happen, be prepared to take on heavy fees that can easily double or triple the amount you borrowed. Many professionals advise people to only take on this debt if it is absolutely necessary!
The amount an individual is allowed to borrow will be based on their monthly income and how much the bank feels they can handle. They amount available for this type of loan is only about $250 to $1000. Guaranteed personal loans for people with bad credit are often a lifeline.
