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How To Get Loans With Impaired Credit

Feb 7, 2008
There are thousands and thousands of reasons why you may need a short-term loan, such as an emergency cash expense, a vacation, a special gift or even just a night out with your loved ones. However, you may be concerned that you are not eligible for a loan because your credit rating is less than "perfect". Not to worry, because even with bad credit, you can obtain instant cash from various payday advance companies.

There are two types of impaired credit loans; secured and unsecured impaired credit loans. Secured personal loans would be relevant if you have missed payments on a previous loan, have had mortgage arrears, or have had credit card problems. In order for you to obtain secured impaired credit loans, you would have to provide collateral to ensure that you will receive payment. Some common examples of collateral include your car, boat or home. If you were to default on your loan then the lender would take ownership of the possession you used as collateral. Therefore, it would be wise to ponder this fact before applying for secured loans.

If you have bad credit, you should review the reasons behind why this has occurred. In some instances, bad credit is the result of unforeseen life events, such as illness and the inability to work. Other times, bad credit is the result of bad spending habits or living "beyond your means". In such cases, it may be a good idea to source credit counseling before taking out impaired credit loans that might lend to an already disastrous debt spiral.

Unsecured impaired credit loans are usually smaller loans in the amount of $100 to approximately $1,000. The maximum amount that would be able to be borrowed would be dependent on the lending institution. Unsecured impaired credit loans will have higher interest rates/fees than secured impaired credit loans for two reasons:

1.) The lender charges high fees or interest due to the perceived "risk" to recoup the loan amount plus fees from those with impaired or bad credit.

2.) Higher fees and interest are charged due to the lender not having the security that an underlying asset would provide.

Another source of impaired credit loans are payday loans, otherwise known as cash advances or sort term loans. These are essentially unsecured loans for a small amount with the life of the loan being the time it takes for you to receive your next pay check. In most instances, payday lenders do not take into account bad credit. However, when they check your credit report, it is only to determine if you have filed for bankruptcy in the past or there is a chance that you would file for bankruptcy in the future.

If you are unsure where to begin in your search for the right impaired credit loans, you may want to contact a mortgage consultant. They will be able to provide you with reliable helpful advice. Another alternative would be to contact a loan establishment who can help in your financial struggles by providing you with instant cash within the hour.
About the Author
Greg Ellis co-founded Cash Doctors, Australia's largest online payday lender. The founders understand their clients needs intimately, having needed a source of convenient credit in years gone by. Cash Doctors.
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