When your bills are piling up, there is no money for groceries and your car needs a new tire, you might feel overwhelmed about your financial situation. Traditional lenders at banks closely examine your credit report and debt load, and they may not be willing to lend you the money you need in order to get over your current financial hump. Turning to credit cards to cover your emergency repairs or unexpected medical bills could lead to astronomical interest rates, making it difficult to pay off the balances in a reasonable amount of time. Whether you have medical bills that exceed your savings or your home or car needs critical repairs, personal loans for people with bad credit could be the solution you need.
What a Personal Loan Is
A personal loan is an unsecured debt. This means that no collateral is necessary. Not needing collateral for a personal loan makes it much different from a secured loan such as a car or mortgage. With no collateral or guarantee, personal loans typically have a higher interest rate compared to a mortgage or car loan. On the other hand, the interest rate on a bad credit personal loan is often much lower than the interest rate on a credit card.
What You Can Do With a Personal Loan
You can do almost anything with a personal loan. Many people use it to consolidate multiple debts, such as medical bills, car repairs and a utility deposit. You could use the funds from a personal loan to take a vacation, throw a party or pay off an overdue water bill.
When to Consider a Personal Loan
A personal loan is a form of debt and should be used carefully. If you have a credit card balance with a high interest rate, using a personal loan to pay off the balance could save you a lot of money. You could pay off the debt of a personal loan faster because of the lower interest rate. For example, if you have a $3,000 credit card balance with a 15 percent interest rate and can afford to pay $100 on it each month, it will take you 38 months to pay off the balance if you do not use the credit card for anything else. A bad credit personal loan could lower your interest rate to about 8 percent, allowing you to pay off the debt in 32 months. Debt consolidation is the most popular reason why people take out a bad credit personal loan. Lowering your debt’s interest rate also reduces the total amount of money that you have to pay off in order to clear the debt. You could save hundreds or even thousands of dollars with a lower interest rate.
Save Money With a Personal Loan
Instead of paying multiple debts each month, a personal loan for your consolidated debt means you make just one payment. The convenience of making one payment could also save you money, especially if you have to pay a fee to make different payments. Having one payment to make each month also lessens your risk of missing a payment and incurring late fees on your account. If you do not have time to negotiate with your creditors or are at risk of missing payments on an account because your minimum payments are more than what you can pay, a bad credit personal loan could get you back on track.
Apply for a Bad Credit Personal Loan
At Drcredit.com, we’ve simplified the personal loan application process. You can do it all online in a short amount of time. We need essential personal and financial information. Once we verify your details, we get back to you with some loan options.
When a low credit score prevents you from getting a traditional loan from a bank close to you, turn to Drcredit.com. We serve as the middleman to connect you with a bank or credit union that is willing to lend you money despite a poor credit rating. Our partnership with hundreds of trustworthy lenders helps you get back on your feet and brings you peace of mind. Contact us at Drcredit.com today to get started with a bad credit personal loan application.
