The recent economic climate has been difficult for everyone, with many people struggling financially. The result is that their credit rating takes a knock, making it harder to get approval on personal loans. Thankfully, there are lenders willing to approve unsecured loans with bad credit.Generally, people approach traditional lending institutions when they want to apply for a loan, usually the local bank. The problem is that these institutions tend to have strict lending policies, so getting bad credit loans approved with no security is practically impossible. But they are not completely impossible.It is worth noting that there is a variety of loan products offered by different institutions – both traditional and alternative. Among them are bad credit unsecured personal loans, so a feasible solution to your financial problems does exist.Unsecured Personal LoansUnlike secured personal loans, this type is granted with no collateral for the lender can be compensated by should the borrower default on the loan. As already mentioned, getting approval on unsecured loans with bad credit is very difficult, but there are ways around this problem.Firstly, the lender needs to be chosen carefully. Usually, online lenders are more accommodating, as they tend to specialize in issuing bad credit loans approved with no security. Interest rates are generally kept to a competitive level, while repayment schedules are often quite flexible. The only negative is that there may be added fees or severe penalties should payments be missed.Another way around the approval problem, is to get a co-signer to guarantee repayments. These individuals agree to make the repayments should the borrower be unable to. So, though applying for bad credit unsecured personal loans, technically some security is provided.Cash Advance LoansThese loans are also commonly called payday loans because they are issued against an upcoming paycheck. They are probably the easiest solution when seeking unsecured loans with bad credit because the lender has little interest in credit history. The only thing that matters is the monthly income the borrower earns.So, as long as the income is proven, approval is not difficult to get. It is also typically necessary to prove that employment has been held for at least 6 months. There is also a need to provide a bank account, so that funds can be deposited directly. But like all bad credit loans approved with no security, there are some compromises that the borrower needs to make.The first is that the interest rate is very high – in some cases up to 30%. But with loans limited to between $100 and $1,500, the actual amount of interest paid is comparatively low. Also, the repayments schedule is extremely short, usually just 1 month. So, while being more likely to get a bad credit unsecured personal loan, there are some negatives.Credit CardsA third solution to seeking unsecured loans with bad credit is to apply for a credit card that requires no security. These are typically available with low credit limits, and the severity of the low credit rating may play a part is deciding qualification for one. However, if granted, it does give the necessary funds to deal with financial emergencies.And while interest rate may be high, compared to a bad credit loan approved with no security, interest is only paid on the actual amount spent. So, while a $2,000 loans will have interest charged on $2,000, if only $1,000 is spent on the credit card in a month, interest only applies to $1,000.However, in many situations, a bad credit unsecured personal loan is required as the sum required is higher.
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