Personal loans for bad credit people with no collateral are available if you really need them, but it’s a good idea to thoroughly check out any lender to be sure they are well-known and respected.  If you’re not careful, you can fall victim to predatory lending practices that can further hurt your financial situation, making your credit worse or even causing you to go broke.  In this article, I’ll highlight some steps you should take and questions you should ask to be sure you’re treated fairly.

  1. Do you really need the loan? – I mean REALLY need it!  You should never take out a loan in order to pay other debt.  This only makes the problem (you being in debt) worse and does nothing to help you get out of debt.
  2. Is the lender reputable? – Be sure to thoroughly research the lender.  Google them and see what comes up.  Are there complaints about them with the Better Business Bureau or other consumer protection organizations?  Any other warning signs that they may not be an honest and reputable company?  If so, look elsewhere for your loan.
  3. How quickly can you get the loan? – If timing is an issue, be sure you understand how quickly the loan process will take.  If it is not spelled out in the documents, ASK!  If you need the money in a week and the loan is going to take a month to close it doesn’t do you any good!
  4. Are the interest rates in line with industry norms? – Again, google is your friend, do a search for Personal Loan rates and see what you see.  If the lender you are considering has very different rates be sure to find out why.  If they are much higher it is obvious but if they appear to be much lower ask for an explanation as to why they are so much lower than the industry average.  You want to be sure you understand all of the terms of the loan to be sure you’re comparing apples to apples as they say.
  5. What are the other terms of the loan?  - How long do you have to pay it back?  When is the first payment due?  How often do you have to make payments?  What happens if you’re late or miss a payment?  Is it a fixed or variable interest rate (meaning your payment could change).  These are all things you’ll want to be sure you understand before you sing on the dotted line.
  6. Can you pay it off early? – You want to be sure you have this option.  It is less common on personal loans, but many mortgages have a prepayment penalty if you pay the loan off early.  This is because loans become more profitable the longer you make payments on them so if you pay it off early the lender may be losing (or not making as much) money off the interest so they charge a fee to help them recover some of that profit.  Insist on a loan with no prepayment penalty!
  7. Can you afford the payment? – This one should go without saying but can you really afford the payment?  Don’t fool yourself into thinking you’ll pick up an extra shift or two to make the payments.  Based on the money you’re making right now, can you afford to pay back this loan?  If not, you need to consider other options.
  8. How can you pay? – does the lender accept payments online or over the phone or do you need to mail a check?  How quickly do they process payments?  This can be important if you’re trying to get a payment in on time and it takes them 3 business days to process a check for example.

Please consider all the items I discussed above.  They can help you avoid getting into financial trouble or more trouble if you’re struggling already.  If you follow these guidelines, you can rest easy when looking for personal loans for bad credit people with no collateral.