Do You Have Poor Credit and Need a Loan? Three Things to Consider

Sometimes everybody needs a little infusion of cash to meet unexpected occurrences, and there are many loan products out there to meet those needs. It goes without saying that if you have an excellent credit rating (770 or above) or just a good credit rating (700 or above), your credit allows you quite a broad range of options to get cash.Happens to Most EveryoneIf you are among the growing throng of folks struggling with poor credit histories, you are faced with a bit more arduous process. The most popular and easily available loan is a poor credit personal loan. A personal loan is a type of loan that differs from a mortgage or auto financing. In both of those there is collateral, or security, to back up the loan.Unexpected NeedsPersonal loans are an expedient way to get cash for immediate expenses. This could be used to pay down other loans such as a credit card, meet an unexpected medical expense, a utility bill that just will not wait another month, or maybe something happened and you are having trouble paying rent, buying groceries, or repairing the car to get to work.Three ConsiderationsSo, where is the best place to go about getting a cash infusion if you have a poor credit rating? Do not go out and start applying for loans. For one thing, most brick and mortar financial institutions are going to turn you down. Meanwhile, as these lenders check your credit reports, these numerous Hard Credit Queries can drag your credit rating even lower. Following are three things to think about before you apply for a poor credit personal loan.One – Secured Vs. UnsecuredPersonal loans come in two forms -- secured and unsecured. A secured loan requires that some type of collateral valued high enough to meet the cost of the loan is available. Should the borrower default on the loan, the lender can seize the property, sell it and use the proceeds to cover the loan. This is usually met by owning a house or a car or some other suitable asset. Secured loans often secure lower interest rates and other more helpful terms and conditions. An unsecured loan is just that, there is no property available to the lender to sell should the borrower default. That is why interest rates are so much higher – the risk to the lender.Two – Collateral Vs. PaycheckIf you have no collateral, unsecured loans are available with the next pay check you are due to receive. You usually will provide a post-dated check to the lender. When you pay off the loan, either present cash to the lender an retrieve your check, or authorize the lender to process the check through their own bank. If there are no funds to cover the check, you will find yourself in some pretty hot water regarding lawsuits and other legal moves.Three – Nothing Vs. NothingIf you have no collateral or no job, you are going to have a very hard time landing a loan from anybody, but still the non-traditional lender will be your best bet on landing a loan. You will have to meet with the lender and plead your case. This beats not getting a loan at all, but you will probably be liable for pretty hefty interest rates because of the extreme risk.Final WordWhether you choose a secured or unsecured type of a poor credit personal loan, you should run your credit scores just to be sure where you stand. Presenting copies of it to potential lenders could save you dings on your credit report while they process the initial application for your loan. It could also give you a little ammo if you try to negotiate the terms of your poor credit personal loan.