Guaranteed Bad Credit Loans are Bad News

You know how the saying goes.  “If it seems too good to be true then it probably is.”  If this is true anywhere it is especially true when looking at guaranteed bad credit loans.  If your poor credit report is keeping you from receiving a traditional loan, this may sound like a good option.  But you should know that there are some limitations that could make this loan less desirable.

Usually when you have bad credit and nothing you want to offer as collateral, you cannot receive a loan at all.  A slight improvement from that, guaranteed bad credit loans will give you money, but only in smaller amounts, usually five hundred dollars or less.

Another problem is that these lending companies can take advantage of the fact that their customers are desperate by charging them higher interest rates.  When the interest costs so much of the loan it makes it harder to pay it back.

The worst part may be that these loans prey on those who are already having financial trouble.  Usually, though not always, a poor credit score signifies that the person does not handle their debt well, meaning they are more likely to make late payments or default on their loans.  With these loans, if you make late payments the high interest still affects your balance with the added cost of the late fees.  This can turn into a cycle that can make it almost impossible to pay it off.

With all of these problems, you may wonder why anyone ever uses these types of loans.  Or you may know.  You may know that it can be quick cash when you need it, or your only option when your credit score is too low to receive a traditional loan.

Despite how easy it may seem to obtain this loan, or maybe because of that simplicity, one should exercise caution when looking into these loans.  First, look into every other possible option.  If your credit score is good enough for a different loan that is probably the better choice.  If you decide this is your only option, you will want to do some shopping around to find the loan with the best interest rates and lowest fees.  And be sure to always read the fine print.

Kari Johnson

Kari Johnson is a first-year student at the University of North Carolina at Chapel Hill, having lived in North Carolina her whole life. At UNC, she is a declared Religious Studies major, and intends to study some form of writing as well during her time and Chapel Hill. She plans to graduate in 2014, after participating in undergraduate research and a study abroad program.

Kari discovered the magic of writing early, in elementary school, and has devoted every spare moment to it since. She writes fiction for her own amusement, and recently began writing articles for The Daily Tar Heel in Chapel Hill. Besides writing, she loves spending time with friends and family, reading, and drinking coffee. She defines herself based on her faith in God, her family roots, and her dream of one day publishing a best-selling novel.

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