High Risk Personal Loans
High risk personal loans are available for those who have poor credit history but still need to borrow money. Because these loans are made to individuals with poor credit and usually do not require collateral, they are high risk propositions for lenders. Lenders typically attach very high interest rates to high risk personal loans to compensate for increased risk.
Advantages of High Risk Personal Loans
Despite high interest rates, there are several advantages to high risk loans for certain borrowers. For those looking to improve their credit score, repaying a high risk loan in full and on time can rebuild credit history. Be sure to notify the credit agencies to monitor your payment performance so that your credit score will rise as the loan is paid off.
A second advantage is that high risk personal loans are very easy to apply for. The applications are generally very simple and require only general personal information. Some lenders allow you to apply for loans online.
High risk personal loans generally do not require collateral or a co-signer. This means that none of your assets or anyone else’s assets are at risk should you default on the loan. Because the application process is quite simple and no collateral is required, high risk loans are usually paid very quickly, sometimes even the same day that the application is received.
Disadvantages of High Risk Loans
However, there are downsides to high risk personal loans as well. Interest rates are high and there are often additional fees involved as well. Because lenders are unable to collect collateral or ensure repayment, the loans are often in very small amounts; many are below $3,000.
You can obtain a high risk personal loan online from several lenders. If you would rather not apply for loans online, try any major credit card company or your local credit union. Before agreeing to any loan, be sure to read the fine print to understand the interest rates and fees involved.
Disclaimer: We are an informational site that receives compensation from companies of products we endorse. We are independently owned and the opinions expressed here are our own.