If you’re in need of a loan, there are several options available to you.  However, if you have bad credit, you may find that some of these options are simply not going to be offered.  Unsecured loans, for example, may not be an option for you because few lenders will lend large amounts of money to those with bad credit unless they can back up their promise to repay the money with a piece of property.  However, just because you can’t get an unsecured loan does not mean you can’t get a loan at all.  There are three different options that many people turn to in this case: borrowing using credit cards, getting a loan designed for people with less than acceptable credit, and refinancing your home.

Using credit cards to borrow money is a very risky thing to do, and for many, it is what got them into a bad credit situation to begin with.  For those who are responsible with their payments, however, this can be a good way to borrow a small amount of money for a short amount of time.  The problem is that credit cards often have higher interest rates than actual loans, and the interest rates can be variable.  If you don’t pay off the credit card quickly, you may find that your interest rate has increased and you’re paying more than you originally expected.  Another problem with using credit cards to borrow money is that you may have the urge to use the credit card for more purchases, or you may have an emergency that requires you to use the credit card.  This means that your total credit card debt can grow very quickly, and you may find that you can’t make your monthly payments.

Bad credit personal loans, on the other hand, do not have some of these disadvantages.  The interest rate will be fixed, and you won’t be able to increase your borrowed principle once you have the loan.  However, banks and other lenders will almost always want you to have property to put up against the loan.  This guarantees them some form of repayment—if you can’t repay the loan, the lender has the right to seize your property and apply it against the principle.  While this does mean taking a risk since you can lose your home if you’re not able to make your monthly payments, it may be your only option if you want to borrow a large amount of money.

Finally, if you own property but don’t want a bad credit personal loan, you may be able to refinance or take out a second mortgage.  With bad credit, this isn’t always an option, but it does have some advantages if you can make use of it.  Refinancing interest rates are often lower than those for personal loans, so you may find that you can get a better deal.  Just remember that if you already have one mortgage payment, taking out a second mortgage may dramatically impact your monthly expenses, so be sure you can make the payments.