With Personal Loans Bad Credit
Doesn't Have to Be a Red Light
One of the first options that people with
bad credit turn to when in need of some quick cash is
a personal loan. These types of loans are often saddled
with very high interest rates, as they are usually unsecured
and based on a person's credit history. But when it
comes to borrowing money, there are other alternatives,
and people with poor credit do not necessarily have
to apply for personal loans.
If you are like most people, you probably get two or
three credit card offers in the mail each day. Or, you
may carry several cards already in your wallet to use
occasionally or for emergencies. One method of gaining
some additional funds is to take out a cash advance
from one of the credit card accounts. This method will
usually incur a higher interest rate than that of a
regular purchase, but this rate can often be much lower
than you would have paid under an unsecured personal
loan from a bank. In addition, there are rarely any
additional fees associated with cash advances like there
can be with a personal loan, which will sometimes charge
a percentage upfront just for access to the funds.
Another way of using credit cards in lieu of personal
loans is to use a convenience check that credit card
issuers sometimes mail out to their customers. These
checks will often have special interest rates that are
in the single digits which apply to the funds as long
as they are carried in the account balance. They're
designed to get the borrower to transfer the outstanding
balance of another card onto the card that issued the
check, effectively stealing business from a competitor.
While some checks have a stipulation that they can only
be used to transfer a balance, others can be used for
any purpose whatsoever. These are the checks that you
need to look out for, as you can use them in lieu of
cash for whatever purpose you were originally going
to take out the personal loan. One thing to take note
of is that these checks will often have an expiration
date, so one must stay on top of the situation. But
if you have some checks that expired, it might help
to call the credit card company and ask for a new set
of checks to use. After all, if they issued them to
you once, why wouldn't they want to do it again, and
have the chance to earn more of your business?
Thus, it is through the use of credit cards that one
can avoid applying for a personal loan with bad credit,
and the inevitable credit check that follows. Even if
the interest rate on a cash advance is higher than you'd
like it to be, it has to be better than the rate you
would wind up with in an unsecured personal loan, which
can have astronomical interest rates. Through the use
of cash advances or special convenience checks, you
can have an emergency source of funds that is ready
to be tapped.
Just be sure to carefully safeguard those checks, because
they can be a target for thieves. Treat them like you
would treat your personal checks for your checking account,
because they are in effect the same thing. If you know
you are not going to be using them, shred them to avoid
any problems.
