Do you need cash? Here are some solutions for those with bad credit

Those looking for a personal loan for credit problems have a few options to explore. Three of the most popular are credit cards, home equity loans, and personal loans for people with bad credit. The money earned can be used for many reasons to include buying jewelry or improving a business. Which type is best will depend on usage intentions and personal financial status.

Here’s a bit about each type to help anyone make an informed decision when deciding to pursue a bad credit personal loan.

Personal loans

One can get a personal loan from most banks. As stated above, they can be used for almost anything and are based on the ability to provide proof of income and assets. Those assets have to be worth the amount the person is borrowing. It is a fast process for the application when these things are present and accounted for and the applicant will find out within a few days at the most if they are approved.

The main disadvantage is that interest rates are usually high, around an average of 12%. The time limit for repayment varies, but is generally no more than two years. Because of this, it is not recommended to finance very large amounts in this way, as many have trouble paying them off in two years.

Credit cards

Credit cards are another option when consumers are looking for a type of personal loan for credit problems. They are the same as insuring a loan, since they are also repaid later. The cards are easy to use because they are widely accepted for paying for almost everything.

They are easy to apply for and can cost upwards of $10,000. The application is reviewed quickly, usually no more than two weeks. There are also those that are reviewed over the phone and approved in just minutes. It all depends on the card company. Terms vary widely, so it’s important that the applicant really review all of the fine print.

Within this print, there will be many things to take note of. At the top of the list are the interest rate, annual fees, excess fees, and more. Debt has been proven to add up faster with credit cards than with other types of loans because they are widely available and easy to use at any retailer. For someone looking for a personal loan for bad credit, this can be an unwise decision and end up damaging credit without repairing it.

Home Equity Line

A home equity line of credit is a smart move. It allows homeowners the ability to borrow against the equity in their home. It is easy to calculate how much someone can get. All they have to do is take the market value of the house against what is still owed. Many choose not to do this if they plan to sell in the near future. However, if you plan to stay there for a long time, it’s a great option.

Like other personal loans for bad credit, the money can be used for whatever they want. They are often used for home improvements, debt consolidation, and much more. Interest rates are low to average and can be paid over up to 20 years in some circumstances. There are not many drawbacks to a home equity credit loan; in some cases the interest is a tax deduction. That’s hard to beat!

The main drawback of this type of personal loan for bad credit is that the person who takes it can sometimes be in a worse situation with respect to their mortgage. If there are two sources of income and they are well above the bills that are paid each month, the person will likely be able to repay the loan easily. Otherwise, it may not be of any benefit. Especially from the consumer who ends up losing a job or is suddenly unable to work. Also, rates sometimes fluctuate.