If you need money right away but have been turned down for personal loans without collateral, you may still be able to get the money you need with a secured bad credit loan. A secured loan is one where you put up something as "collateral" to make sure you will pay back the loan. If you don't pay back the loan in a certain amount of time, the lender can take the collateral and sell it to get their money back. Secured loans are made to help people who have bad credit or no credit at all get the loans they need. Also, because the security deposit (which is another word for collateral) guarantees that your lender will get his money back, most lenders will give you a loan with lower interest rates than if you didn't have any collateral.
Most people use real estate or cars as collateral, but you can use anything that is worth as much or more than the amount you want to borrow. Most of the time, you don't have to give up your car or home. As long as you keep making your loan payments, you can keep driving it or living in it. Instead, you sign a note that gives the lender the legal right to your car's or home's title or deed. If you don't make the payments you agreed to make, or "default," on the loan, the lending company can take your property. When a car is taken back, this is often called "repossession." It's called a foreclosure when it comes to a house. In either case, the lender can sell your property to get back the money they loaned you.
Most of the time, cars and houses are used as collateral, but some lenders will also accept jewelry, coins, and other collectibles, as well as other types of vehicles. Most of the time, if you use something like jewelry or collectibles as collateral for a loan, the lending agency will keep the item until the loan is paid back.
How to get a secured loan with bad credit (b)
A lot of lenders, especially banks, don't offer secured loans other than second mortgages. Other places offer almost nothing but secured loans. You can find secured loan lenders in the phone book, the newspaper, and, more and more, on the Internet. Shop around and compare the terms and interest rates of loans from a number of different lenders. You'll find many internet sites that let you request loan rate quotes from multiple lenders at once.
Once you've asked for a loan quote, representatives from several companies will get in touch with you, and you'll be able to get a good idea of what each can offer you in terms of interest rates and other charges and fees. Choose the one that fits your needs best and fills out the loan application. That's all it takes.
