In the age of corporate greed and bank bailouts, the consumer has been dealt a bad hand and forced into situations where we struggle to make ends meet to care for our families. Family and shelter will always come first, and what this means is that we may be forced to late pay some of our creditors and tarnish our credit.
But is this really any different than the major corporations like Goldman Sachs and General Motors who filed bankruptcy and defaulted on billions of dollars? It is no different except for the size of the credit! The end result of slow-paying our creditors is that our credit can be deemed “bad”. What doesn’t change is that we (just like the big corporations) still need loans!
Other than for cars and homes, there are a variety of reasons why people take out Bad Credit Loans. A personal loan can be secured or unsecured, which means that there may be collateral or not. Unsecured loans usually carry a higher rate of interest because they are not backed by collateral and thus present a greater risk to the lender. If you enter into a personal loan backed by an asset such as a home or a car, the lender will have the right to seize your pledged asset in event of default.
There are Bad Credit Loans available for an assortment of situations. Many people find themselves looking towards a personal loan when they plan to have a wedding and often the engaged couple will take out a joint loan. Even when people have the money for a wedding, they may need a little extra cash for some of the related costs, such as that perfect engagement ring that she has her heart set on. You may not be able to afford it right away but you can take out a loan and repay it over a period of time.
Further, there are a number of expenses that you may not be able or willing to put off a holiday, for instance, or a quick flight home from school to dump your dirty laundry on mom. You may decide to surprise your family and significant others with a trip home for Christmas or Thanksgiving.
Or maybe, since you’re both working and stretched for time, it’s the dishwasher that you really need. You have a steady stream of income coming in but simply don’t have the liquidity to layout for a big purchase. It can be put off, but you figure that there is enough money to pay it off in time, so why not.
There may be added requirements to deal with when your responsibilities are increasing, such as the birth of a new baby or school fees when your little one starts going to tap dance school. And then there are the add-ons you simply have to have when you move into a new house – that perfect rug or that cozy lounger. The truth is, life is expensive… Costs are always surfacing and many times unexpected.
The best bet is to make sure that you designate emergency funds for the surprise expenses; however, this is easier said than done. If this is not reasonable, then then a bad credit loan may be for you; all you have to do is plan appropriately and ensure that you have an adequate stream of income to service your loan.