It may seem availing online loans is a child play these days, but it is not so for everyone. Traditional financial institutions and quite a few non-traditional lenders are reluctant to extend Loans for Bad Credit to those individuals with a bad credit history or no credit history. If you have taken a prior loan and defaulted from paying regular interests and agreed upon installments, it results in a bad credit history.
Quite a few lenders are willing to extend personal loans or other loans against any equity you own. For example, traditional financial institutions allow you to mortgage your home for a substantial amount of cash loan. It is not unheard of for individuals to mortgage their homes to advance payments towards their dream car or vacation. The fact unfortunately is that not everybody can afford to own a home.
Loans like Logbook loans extend a loan amount to you using your vehicle as collateral. As long as you own a vehicle which is in good condition, free of financial commitments like earlier loans etc and is properly insured, a lender can extend up to 75% value of your vehicle as a loan amount. All you need to do is keep your logbook with the lender and agree to give him the right to sell your vehicle in case you are unable to repay the loan amount.
There are also lenders who will extend a ‘cash advance’ without a need for collaterals. Loans of this nature are called Payday loans. In a Payday loan as long as the lender is satisfied that you have a source of income, he can extend a certain amount of loan against a post-dated cheque amounting to your pay-cheque. This means that the amount extended to you as a loan is recovered in your next pay-cheque.
Both logbook loans and payday loans can make the loan money available to you in a very short time. However, what makes the logbook loan a safer bet is that it charges a significantly lower rate of interest as opposed to the payday loan. The payday loans charge a heavy interest and the money you end up paying back to the lender ends up being much more than the money you borrowed from him.
The amount of cash which can be made available to you is also low when compared to Loans for Bad Credit availed against equity you own. The small cash advances made available by the payday loans end up being a heavy debt because of the huge interests charged upon them. The safest way to borrow money if you have a bad credit is to explore the option of loans against equity.