Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 13, 2012

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When it comes to financing personal loans, nothing matters more than borrowers’ credit scores. Those with good credit find little difficulty in acquiring the amount they need, but for those with poor credit, the process of obtaining cash can be difficult. We try to alleviate that difficulty by offering bad credit personal loans to interested borrowers who qualify.

[loansform] Most of the time this type of financing requires some form of collateral that somebody with better credit wouldn’t need. That collateral can be in the form of an automobile, home, or an upcoming paycheck. The collateral is used to reduce lenders’ risks when lending their money out to individuals who have poor financial histories.

In the event a borrower defaults or falls delinquent on their personal loan backed by collateral, the lender can either repossess or place a lien on whatever form of security the borrower offered.

Bad credit Loans backed by automobiles usually allow for the lender to repossess the automobile if the borrowed money is not returned. Financing backed by property usually allow lenders to place liens on the property and collect from a borrower through extra bills. Finally, money secured by paychecks allows lenders to cash a pre-written paycheck come a borrower’s next payday.

Don’t worry though: borrowers will receive ample notice and time to remedy the situation in the event a lender decides to pursue the collateral.

Bad credit personal loans may not carry the most ideal interest rates or terms, but they are still available, and responsible borrowers can find their services invaluable in times of need.