People with bad credit don’t always have many options when they need money for an unexpected expense. In general, those with good credit scores will simply ask their local bank for an unsecured personal loan and will usually get favorable terms and reasonable monthly payments. However, this is not the case for borrowers with bad credit. These people often need to take advantage of the use of private loan options. Therefore, there is a need for additional services designed specifically for when, despite bad credit, a quick personal loan is needed.
private loans
Strictly speaking, a private loan is any loan offered by one individual to another individual (also called a peer-to-peer loan). Basically, instead of using a traditional financial institution to finance your personal loan, you can go to a friend, family member or co-worker to get the money. If you have a good relationship with these people and you know they have the money you need, this is a great option.
However, many people with bad credit either don’t know of others with this flexibility or are embarrassed to ask for help in the first place. These people still have options, however, when it comes to private loans.
discretion is key
If you need money for an unexpected expense, perhaps a car repair or a traffic ticket, it can be hard to find the cash right away. If you have bad credit, you also need to worry about your ability to acquire the cash in the first place. Maybe you don’t have credit cards, or the ones you do have already have high balances. This is when you need to find someone who will offer you the money without much hassle. Private loans represent such a case.
People who find themselves with extra money and who are looking for a non-traditional investment opportunity often congregate online through lending agencies. These agencies take the investor’s money and offer it as a private personal loan to those who need quick cash without the aggravation of strict credit standards and bank denials. The interest or fee you pay on these loans is then divided between the initial investor and the loan agency. You can get money without hassle and these investors can earn some extra money.
Online private loan statistics
Since the degree of risk will vary from borrower to borrower, the terms of these private loans will also vary. In general, you can borrow anywhere from $100 up to $5,000 at different interest rates and fees. Depending on the information you provide, which will include proof of identity and income, interest rates on these loans can be as low as 6% or as high as 35%. Therefore, it is of the utmost importance that you get quotes and compare prices before taking money on a private loan. Be absolutely certain that you have the means to repay the lender and the investor from whom you took the loan.
A good solution
In the event that you need money and have no other means of obtaining it, using private loans online provides bad credit borrowers with a good solution to their problems. Although the terms of these loans can be quite strict and the interest rates high due to your bad credit and risk, if you have no other option, they are a viable tool to help you in times of need.
