In the age of corporate greed and bank bailouts, the consumer has been dealt a bad hand and forced into situations where we struggle to make ends meet to care for our families. Family and shelter will always come first, and what this means is that we may be forced to late pay some of our creditors and tarnish our credit. But is this really any different than the major corporations like Goldman Sachs and General Motors who filed bankruptcy and defaulted on billions of dollars? It is no different except for the size of the credit! The end result of slow paying our creditors is that our credit can be deemed “bad”. What doesn’t change is that we (just like the big corporations) still need loans!
Other than for cars and homes, there are a variety of reasons why people take out Bad Credit Loans. A personal loan can be secured or unsecured, which means that there may be collateral or not. Unsecured loans usually carry a higher rate of interest because they are not backed by collateral and thus present a greater risk to the lender. If you enter into a personal loan backed by an asset such as a home or a car, the lender will have the right to seize your pledged asset in event of default.