Loans for people with bad credit, also known as payday loans, are financial products designed with people with bad credit history in mind. Such circumstances usually occur when a person is unable to pay back his loan on time or to repay it at all. An unpaid loan can mean any type of loan including a credit card bill, an overdraft, a mortgage, or a personal loan granted to this person by a bank or a building society.
Being identified as a person to whom it becomes more risky to lend money to is not a reason to panic. While many high-street banks and building societies might not be willing to lend you any money until your credit is repaired, there are many lenders out there offering loans for people with bad credit and adverse credit histories.
While anyone can apply for this type of loan, you need to fulfil certain requirements to be approved. In order to apply for loans for people with bad credit,you need to be at least 18 years of age and employed at the time of your loan application. You also need to be the owner of a bank account where the money is going to be deposited not long after you are approved for the loan.
While bad credit loans usually have a higher APR, the number of licensed lenders on the market offering such loans is high. Those lenders are also called sub-prime lenders.
Before filling an application for a bad credit loan, it is a good idea to compare the offers of at least a few sub-prime lenders to find one that will grant the best conditions. Not all lenders offer the same interest rates. Very often, you will be better off if you take your time to find somebody who can present you with the smallest APR possible.