What Types Of Bad Credit Loans Are Available?

Bad credit loans will fall into one of two categories – secured or unsecured.

Secured loans involve using something of significant value as collateral for the loan, usually your house. The lender will determine the loan amount and interest rate based factors such as your credit score, the value of your home, and your overall debt load. Each lender weights these factors differently and some consider other factors as well, so it’s important check with each lender about their specific criteria.
Unsecured bad credit loans, however, are among the most difficult to get. They represent a very high level of risk for the lender, so they are naturally much more cautious about underwriting this type of loan. If you need an unsecured loan, though, don’t lose heart because while it is difficult to obtain one, it is possible. Look for lenders who specialize in this type of loan; they are sometimes referred to as sub-prime lenders.