In the struggling economy of today, the most apparent outcome has been on individual credit scores. As jobs are lost and the cost of living is high, requests for payment deferment increase as well. People are unable to pay their bills in a regular fashion, and risk the fall of their credit scores.

Unfortunately, a low score only leaves those in need with one option: bad credit unsecured personal loans.

Every credit inquiry, which is run when you ask for a loan, a credit card, or sometimes a job, decreases your credit score. Every payment that is late beyond 30 days is also another factor leading to a low score.

As unfortunate as it seems, financial burdens come in spirals; if you are unable to make on-time payments, then you will be unable to borrow any secured money in the future.

A credit score is just as important, if not more crucial, than an individuals reputation in our country. Many private banks and automobile finance companies advertise to those with less than desirable credit.

The catch is the high APR, also known as rate-for-risks, that you must oblige to because of a bad credit history.

Lending money to those with low scores is considered a risk, because they are known to have a bad history of paying the money back. If no collateral is offered, then these rates are even higher. Ultimately, it will cost a lot of money to borrow some.

An unsecured loan is one that has not been secured by collateral. When there is no possession of value to claim in case the money is not paid back, the loan is not considered secure and has a higher risk, and consequentially, a higher interest rate.

These types of loans are also called signature loans. Personal loans are borrowed from private companies with fewer clients, most of which do not have good credit.

Although these loans are considered expensive, for someone with low credit, they can be a luxury. When in need and with low credit, no bank or investor will be willing to lend money, especially without collateral.

But for those who are in need of money urgently, and cannot provide collateral or a high credit score, an unsecured personal loan is an option that is worth the high rate.

Just be sure that before you get one of these types of loans you determine if you truly need the money for something critical or if it is for a purchase that you can wait on. Don't go into debt, espcially at a high interest rate for things that aren't a necessity.