If you have experience bad credit in the past, or you are currently experiencing bad credit, you have probably undergone the frustration of being turned down for a loan. There are several companies who specialize in offering bad credit loans to those who desperately need the help. You have probably heard of payday loans and personal loans. These 2 types of loans are the most common for those who have bad credit.

A personal loan can be huge sigh of relief to anyone who has an unexpected bill to pay. A personal loan typically allows a person to obtain the needed money without collateral. A personal loan is unsecured, which means the bank is taking a risk on you based on your past payment history. Many companies will require that you have a co-signer on an unsecured personal loan, just to protect them in case you default on the loan.

Unsecured personal loans offer cash now in exchange for high interest rates and penalties. Many borrowers are willing to pay a whopping 25% interest rate in exchange for having $1,500 in their pocket during an emergency. Many people who obtain an unsecured personal loan many find themselves in a worse financial situation than they were in before if they were already struggling to pay their payments. It mostly depends on your ability to make payments and the unsecured personal loan you agree to.

If you have bad credit, most lenders will offer you an unsecured debt consolidation loan. Like an unsecured personal loan, the debt consolidation loan does not need collateral. By eliminating the need for collateral, the loan approval time is sped up and you are able to get an answer quicker. An unsecured debt consolidation loan will take all of your debts and lump them into one manageable loan, allowing you to pay it off in a convenient manner. If you are experiencing financial difficulty, a debt consolidation loan may be one of the best things you can obtain. The ability to pay in a single monthly payment versus multiple payments to several different lenders each month will not only save you time and hassle, but it will help you avoid late payments or missed payments.

How do I obtain a personal loan?
The first step you need to take to determine if you are eligible for a personal loan is the application. You have probably filled out a loan application before, but if you have not it will ask for the following information:

• Your full name
• Your social security number
• Your income amount, including your last 2 pay stubs

The loan officer may ask you for other information, but be sure you are ready with this information when you go in to apply for the loan. From here the loan officer is in charge of determining your credit worthiness, despite your bad credit. Some lenders do have a specific cut-off line and will deny your loan request if your credit score is under a certain level. Other companies do not require a credit check when you apply for a loan. If you happen to find this type of company, you will notice they will only allow you to borrow $1,500. Many loan officers will encourage you to increase the length of time you have the loan, allowing you to have smaller monthly payments. If you can afford to pay more each month, you should because the interest rates are generally higher on these types of loans.

If you have held the same job for a number of years, this will help your chances in obtaining a loan. This demonstrates to the lender that you have a steady income and you do not change jobs several times within a given amount of time. When you apply for a personal loan, you will probably receive an answer within 24 hours. If approved, you will need to sign the written application, a promissory note, and agree to a payment schedule.

What about a person who is trying to buy a home with bad credit, how can they get approved for a loan? This is a common fear for many people who are experiencing bad credit and often leaves them hopeless about their future. If you are in this situation, don't worry, just because you may have filed bankruptcy or you have a foreclosure on your credit report doesn't mean you can't purchase a home. You can buy a home with bad credit, but keep in mind that you will be paying a higher interest rate than a borrower with good credit and you may not be approved over a certain limit.

If you have filed bankruptcy in the past, it will remain on your credit score for 7-10 years, depending upon the type of bankruptcy you filed for. If you want to obtain a better rate on a home loan, wait 4 years from the time you filed bankruptcy before you apply for a loan. Be prepared to make a 25-35% down payment at the time you purchase the home and remember that you will have a higher interest rate and less flexibility with the loan terms. There are sub-prime lenders who will offer you a loan if you're FICO score is at least 580.

How to improve your chances at obtaining a bad credit loan
There are several steps you can take to improve your chances for obtaining a bad credit loan. Here are a few things you can do to begin:

• Open a major credit card and do not carry more than 30% of the total limit available.
• Demonstrate your ability to make timely payments if you are currently paying on credit cards and pay more than the minimum payment amount.
• If you have filed bankruptcy in the past you should wait 4 years before applying for a loan.
• Show steady employment at one job for 1 to 2 years.
• Save a down payment of at least 10%

Other loans for poor credit
Another option you have is to take apply for a payday loan or payday advancement. This is a short, small loan that will provide you with the limited means you need to get by. The loan is intended to cover your expenses until your next payday. Typically these loans range between 100-500 dollars and are due within 2 weeks with a large interest rate. The interest rate can vary, but they are usually around 400% APR. For a 2 week loan, the fees are roughly $15 for each $100 lent.

When you apply for a payday loan, you will write a postdated check to the lender in the full amount, plus fees. You are expected to pay the loan in person, if not, the lender will process your check and the funds will be withdrawn directly from your checking account. This may cause a problem for you if you do not have sufficient funds in your account to cover the check. If you bounce the check to the lender, you will face bounced check fees from your bank in addition to the cost of the loan and increased fees may occur from the lender with a higher interest rate.

You will need to bring in 2 recent pay stubs when you apply for the loan to prove that you have a steady source of income. You must also provide recent bank statements to the lender so they can evaluate your ability to pay back the loan within 2 weeks.

There are several ways to apply for payday loan. You can contact your local payday advancement loan center or you can search online for a payday advancement company. Online payday loans are easy to apply for and you can receive the money quickly. Typically you will fill out the online application and fax your personal information to the company. The lender will request your bank account numbers, social security number, employment information, copies of recent bank statement, cancelled check, and signed paperwork. If you are approved, the lender will deposit the money directly into your checking account within 24 hours. The loan will then be automatically withdrawn on your next payday for the total amount, plus interest and fees.

If you already own a home, you have a couple different options for obtaining a new loan with poor credit. You can always refinance your home and switch from an ARM to a fixed interest rate, or you can apply for a home equity loan. If you choose to refinance your home, you may obtain a lower interest rate and be able to get cash to pay off high interest rate debts. Your property will be held responsible if you fail to meet the payment obligations, so be sure this loan is in your best interest.

Home equity loans allow you to access about 80 percent of the value of the equity in your home. Many people with poor credit are using home equity loans to pay for home repairs, pay for credit card, college education expenses, etc. Home equity loans provide you with a lower interest rate than other options. Again, your home is in jeopardy if you fail to meet the payment guidelines.