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.