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Bad Credit Personal Loans What Are They

by Jim ONeil on September 4, 2010

Everybody is feeling the economic crunch and that led to many seeking out the best loans possible to make both ends meet in times of dire need. Different types of loans have sprouted in aid of individuals with financial issues and also to earn from it. It would always be handy to have an entity that lends you money that can be paid in installments especially when unexpected become what they are – unexpected. Beyond the salary expenses like unplanned car bills, hospitalization, a huge tax bill, a great business opportunity that may turn to stone if not grabbed, et cetera cannot be set aside like anything else and that is where personal loans become very useful. But the problem arises – what if a person has bad credit?

Well, the first step would be to pull up one’s credit report and try to fix it. If there is an item in the credit report that need not be there, there is a dispute process that needs to be followed and the government mandates the credit bureau to come up with a resolution or at the very least a rely to the dispute within the next thirty to forty-five days. With a great credit score (low risk score), you can definitely get approved on a loan application with minimal hassles and a very low interest rate.

Now, what if a person has bad credit and he desperately needs a loan as soon as possible and cannot wait for the resolution of the credit bureau. This is where bad credit personal loans can play a role. First off, keep in mind that a personal loan is an unsecured type of loan, which is totally different from a housing loan or a car loan. And being unsecured as it is brings more risk to the lender. And in order to apply, one must also fill out a loan form and has to undergo a screening process where the lender still assesses the person’s credit reliability even if he was slapped with a low credit score. However, background check is not performed and the release of the loaned amount is pretty fast – most of the time within twenty four hours.

And the application procedure is really quick, not requiring any one to fall in line for long hours and being interviewed by credit investigators. The sign up process is done online, which actually is good because it eliminates embarrassing long lines of people applying for loan. And there is less paperwork in bad credit personal loans, most of the time consisting only of the filled-up application form, a payment schedule, and a promissory note. Less paperwork means less hassle.

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