Bad Credit Personal Signature Loans

by Tracy Murray-Crouch

Personal signature loans are typically intended for people who have good credit. When you’re trying to get a loan it’s always wise to put yourself in the lender’s shoes. Let’s say a friend approaches you and says she needs $1,000 to cover her utility bills until she gets her next paycheck. Or maybe she needs the money longer term because she needs a new washer/dryer combo. What will be the very first thing you ask her?

That’s right – “How are you going to pay me back? Can you handle the payments?” And the all important question: “If you end up not being able to keep up with the payments, what can you offer me as security on the loan?” Now, if she’s using the money to buy a washer/dryer you could take those from her and sell them to recoup at least a percentage of your money. But if she’s borrowing the money to pay bills, there’s nothing to repossess. If she tells you she doesn’t have the greatest fico score, you’re looking at giving her a bad credit unsecured personal loan. Does the thought of lending her the money make you nervous? If so, you’re starting to see how picky the banks can be when they’re looking at offering a loan to a person with no collateral other than her good name.

The bottom line is personal signature loans for people with bad credit are going to be hard to find. You’re not offering the lender any tangible security on their loan; and you’re not offering them mathematical security in the form of a good credit history and high Fico score. Their only recourse is to attempt to ruin your life by crushing you with high fees per dollar borrowed, very short repayment periods (which you won’t meet, meaning you’ll incur more fees), and worst of all – this kind of loan is typically not going to do your credit score much good.

So while you may have no alternative to seeking instant approval unsecured loans online right now, you have to take a step back and evaluate what got you here in the first place. I mean, even credit cards would be a far superior borrowing vehicle. but if you’ve really trashed your credit, I’m guessing you’ve had credit cards before and got yourself into trouble there, too.

Do what you have to do today. But…get a secured credit card (one that DOES report to the credit agencies), put a small balance on it, and make your payments on time. Slowly but surely your credit will improve and you won’t have to go down this nasty personal loans path many more times.

No Comments

No comments yet.

RSS feed for comments on this post.

Leave a comment