Planning Ahead For That Bad Credit Loan Can Help You Score It

Online, March 29, 2011 (Newswire.com) - There's a myth floating around out there that if you have bad credit or have filed bankruptcy, you may not be able to get a loan (http://www.americanunsecured.com). The reason this myth exists is that in the past, lenders didn't want to lend to people they considered risky. Even if you had defaulted on a couple of payments, there was a chance your loan application would be rejected.

But these days, the scenario has changed for the better. Today, there are many lenders open to accepting your application, even if you have a less than stellar credit history.

Even if you have filed for bankruptcy, or have mortgage arrears on your credit history, you can still get a loan. These loans are called bad credit loans (http://www.americanunsecured.com/personal-loan.php), and are specially created for people with adverse credit. Apart from giving you the financing you need, these loans give you an great opportunity to make amends and improve your credit score.

There are two types of bad credit loans: secured and unsecured. Since the borrower is considered high risk, the rate of interest associated with these loans is higher. But you can still make the most out of it and get better rates if you have security collateral to pledge against the loan. It can be property or a vehicle, or some other asset of equal value. This reduces the risk for the lender, and will open the door for negotiation. If, however, you don't have anything to pledge as security, then be prepared for higher rates.

The amount you are looking to borrow also matters. If you are looking for a small amount for a short period of time, you can opt for a short term loan, which can be issued within 24 hours but have to be repaid on your next or subsequent pay period. These loans can be for as little as $100, and there is no credit check required in many cases.

To be sure you get the best rate on a bad credit loan, shop around until you find the lender who is able to offer you good rates, terms and conditions. Making a large down payment will help reduce the rate. Plan in advance, and start saving for that down payment.