Personal loans for those with bad credit are designed for people who have damaged their credit score in some way.  They are high risk loans to the lender and therefore are also known as “high risk personal loans”. Finding a guaranteed high risk personal loan can be a little more difficult than some other bad credit loans but it is still entirely possible.

Most guaranteed high risk personal loans work like payday loans.  Which of course means that they carry high interest rates.  These types of loans are designed to be short-term and you need to be especially careful when picking the lender.  Watch for the fine print in many of these types of loans as payday loans can get quite expensive if you don’t repay them on time.  You should always make sure that you never borrow more than you could repay the next month.  Otherwise you can get caught up in the never-ending cycle of paying interest and penalties.

Most of these high risk personal loan programs don’t require a credit check. And qualifying for them is quite easy. Too easy in fact for many people as they end up borrowing more than they can repay in a decent amount of time. But most guaranteed personal loan lenders will still want you to have an active checking account.  This is because they can have a much lower default rate when they can collect the payments electronically straight from your account.  Also most lenders want you to have a good job history with at least six months at your current job.  They also need you to be able to earn at least $1000 a month.  Obviously you also have to be over 18 years of age and a US citizen.

Although these loans are high risk for the lender they are not stupid and will do everything they can ensure that they get the loan repaid in full. The most you can expect to borrow at a time is $1,500.  Above that you’re going to have to look to a unsecured loan where you can get a loan for as much as $50,000, depending on the circumstances.

All in all, guaranteed high risk personal loans are indeed useful but you need to be very careful deal with how much you borrow.  You never want to borrow more than you can repay by the due date or you can expect to pay high interest and penalties.  Which can lead to borrowing more money in the future and more penalties and interest. Also make sure that you look around and find the best lender that you can. I would avoid the obvious shady companies in favor for those with a good reputation.