Having a low credit rating can play havoc with your chances of securing a loan from traditional lenders, but that is not to say there is no chance at all. In fact, bad credit borrowers have financing options, it is just that getting what are regarded as high risk loans with bad credit involves accepting less than perfect terms.In reality, these loans are much more expensive than those normally available, but since approval despite poor credit scores is possible, the extra expense is often worth accepting. The question is which of them is best suited to your own needs, and what are the best terms to secure.The array of high risk loan options is not very extensive, but we have listed 4 of them most worth consideration. These are the most commonly sought after and are also the most likely to be approved. Payday LoansArguably the most popular option amongst those seeking high risk loans with bad credit, despite the fact it is also the most expensive. The reason is that approval is almost certain, with no credit checks to worry about and proof of a large enough income the crucial condition.But approval despite poor credit scores comes at a price. Loan limits are low (maximum $1,500) and the interest rate can be as high as 30%. And with repayment terms as short as 30 days, the pressure to repay in full in one go is extremely high. Payment is taken directly from the next paycheck, leaving little over to meet regular monthly expenditure.Unsecured Personal LoansTraditional lenders may be reluctant to grant high risk loans to bad credit borrowers, but that is not to say all lenders are so reluctant. Some banks are willing to do so, though will charge high interest rates. Unlike payday loans, however, unsecured loans can be as much as $25,000. And with no collateral required, it is available to those without any major assets.However, these are not ideal for those seeking high risk loans with bad credit, as a credit check is likely to be carried out, and only those with a good credit history will be considered. The term can also be longer, with up to 7 years to repay.Person-2-Person LoansThis is a modern lending option, available online only. Basically, a dedicated website brings together people seeking loans, and individuals willing to finance them. Most important, banks and financial institutions are not involved so getting approval despite poor credit scores is more likely.The process involves pitching a loan proposal that site members then bid on to secure the deal, so with these high risk loans, the power is in the hand of the borrower. Credit scores are not too significant but proof of employment is. It might take as long as a week to access any money.Loans With CosignersFinally, if the task of securing a high risk loan with bad credit is becoming too difficult, getting a cosigner involved in the deal is a definite solution. A cosigner is not considered security since nothing is provided as compensation, but they guarantee the monthly repayments will be made.As a result, the risk factor is practically removed, so the interest rate is reduced and approval despite poor credit scores is all but guaranteed. The only conditions associated with the cosigner are that he or she has an excellent credit record and a large enough income to make repayments.In truth, the loan is not really considered a high risk loan, but it is ideal for those with very poor credit ratings.
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ABOUT THE AUTHOR
Lara Sawyer is the author of this article. She works successfully as a financial advisor with years of expertise on Bad Credit Loans Guaranteed Approval. She publishes informative articles about Guaranteed Bad Credit Loans, home loans, credit cards, auto loans, business loans and others at http://www.fastguaranteedloans.com
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