Having bad credit makes it extremely hard for someone to get any kind of loan. Most lenders, especially now that they are in trouble for making loans to people with bad credit, will only agree to lend you money if your credit score is 650 or higher. If you have very bad credit, which is a score lower than 580, this can make the process to get a loan long and hard. Even if you are lucky enough to get a high risk loan, there will most likely be an extremely high APR on it.

However, there are a few options for people with bad credit to get loans. They may even be beneficial to you as you increase your credit history and establish yourself as a trustworthy borrower able to make payments. This will improve your credit score and allow you to refinance your current loans or take out other loans in the future at discounted rates.

There are two main types of loans you can get, secured and unsecured loans.

Secured Loans

Bad Credit secured loans are “secured” by collateral, or a valuable asset that that borrower owns. They are less risky for banks and other lenders because in the event of a default the bank seizes the collateral and can sell it to recoup some of their money. This makes them easier to obtain, especially for someone with bad credit, and also gives them a lower interest rate than unsecured loans. The downside is that you risk losing a piece of your property if you go into default on the debt.

The most popular option for secured loans by far is a home equity loan. Home equity loans are taken out against the equity that you own in a house. You don’t need to have your house completely paid off to obtain one of these, you can take one out for any amount of ownership you have in the house. However, they can still be a little difficult for people with bad credit to obtain and may contain a significant amount of origination fees.

Secured loans against cars are also a popular option. These generally don’t require much in the way of credit checks and are given out as long as your car doesn’t have any outstanding debt on it. The amount of money you’re eligible for depends on the make and model of the car that you drive.  There are also motorcycle loans for people with bad credit available.

Secured loans can also be taken out against jewelry or other collectibles, although regular banks normally don’t deal with these. Your best bet to find a reputable lender for these type of loans is your local yellow pages. However, the bank usually keeps whatever jewelry or assets you pledge in their custody until the loan is repaid to make sure you don’t sell the assets and take off with their money.

Unsecured Loans

Unsecured loans are loans that are not secured against any type of asset. Eligibility for these is mostly determined by your credit score and credit history. This makes them extremely hard, if not outright impossible, or people with bad credit to obtain. Sometimes you may qualify for a credit card with a high interest rate, but you may even be refused these. The only sure source of unsecured financing for someone with bad credit is a Cash Advance loan.

Cash advance loans, also known as a Payday Loan, are only for a short duration, until you receive your next paycheck. They’re also for small amounts, usually between $100 and $1000 and require no credit check. All that is required for a payday loan is that you have a steady job, are over 18, and have a checking account.

However, all of this comes with a price. The interest and fees on payday loans are prohibitively expensive, sometimes exceeding an annual interest rate of 300%. If you’re in a real emergency, then these loans are an option, but be very careful with them. You may end up stuck rolling over your debt and paying more in interest than your actually borrowed.

If you have no credit or assets but need a loan, you have two decent options. Either find a co-signer who will be willing to vouch for you if you don’t pay the loan or wait until your credit history improves to apply for the loan. Finding a co-signer can result in some tension however, especially if you don’t repay the loan and your friend or family member ends up stuck with the bill.

Do you research before applying for any loan, especially if you’re going through a lender that deals exclusively with borrowers with bad credit.  These lenders will insert many different clauses in the fine print that may cause your loan to end up being more expensive than your originally planned.