First, we’ll understand about ‘bad credit’. Bad credit indicates a person’s credit history – “It shows that the borrower has a high credit risk”. A low credit score signals bad credit. On the contrary, a high credit score signals good credit. Now, we can look at what a bad credit loan is.
What is a bad credit loan?
A bad credit loan is a type of cash loan that an individual avails even when he/she is having a low credit score (bad credit) to fulfill his/her obligations.
What is a bad credit loan?
A bad credit loan is a type of cash loan that an individual avails even when he/she is having a low credit score (bad credit) to fulfill his/her obligations.
Reliable sources that can provide bad credit loan to an individual
1. Secured bad credit loans
A pawnbroker/pawnshop can give secured bad credit loan against collateral, which could be a car, a motorcycle, a boat, a caravan or any other asset that is accepted by the lender.
2. Unsecured bad credit loans
Compared to large, major banks and lenders, an unsecured bad credit loan is a more flexible personal loan. As these loans are unsecured, you don’t have to use any of your assets such as a car, a truck, a motorbike etc. as collateral. These loans can be at times a practical choice for people who have a low credit score (bad credit) but require access to credit. As there is a greater risk to the lender, a higher rate of interest may be applied to your loan; Nimble is one such unsecured bad credit loan provider who offers short term loans.
How is a secured bad credit loan safe as compared to an unsecured bad credit loan?
- It’s hard to get a guaranteed loan from banks or other financial institutions when an individual is having a bad credit (low credit score).
- Pawnbroker/pawnshop can provide secured instant cash loan to the individual against any asset that the pawn shop accepts. Bad credit (low credit score) does not have any impact on a pawnbroker.
1. Secured bad credit loans
A pawnbroker/pawnshop can give secured bad credit loan against collateral, which could be a car, a motorcycle, a boat, a caravan or any other asset that is accepted by the lender.
2. Unsecured bad credit loans
Compared to large, major banks and lenders, an unsecured bad credit loan is a more flexible personal loan. As these loans are unsecured, you don’t have to use any of your assets such as a car, a truck, a motorbike etc. as collateral. These loans can be at times a practical choice for people who have a low credit score (bad credit) but require access to credit. As there is a greater risk to the lender, a higher rate of interest may be applied to your loan; Nimble is one such unsecured bad credit loan provider who offers short term loans.
How is a secured bad credit loan safe as compared to an unsecured bad credit loan?
- A person can get a higher amount of money as per the valuation of his/her asset in a secured bad credit loan.
- You will be dealing with a licensed pawnbroker and moneylender so you won’t have to worry a bit while availing a secured bad credit loan.
- With a secured bad credit loan, you will get cash in your hand whereas with an unsecured bad credit loan, your loan amount will be deposited in your bank account.
- A person, who applies for a secured bad credit loan, gets guaranteed loan approval whereas person applying for an unsecured bad credit loan may get the loan approved depending on his/her employment.