The thing about financial emergencies is that they often occur when we least expect them. The traditional advice is to have an emergency fund ready for these types of situations. And that’s perfect advice – provided you make enough where you can build up a large enough emergency fund, and that you don’t get hit with multiple emergencies in a row.

But what about if you’re dealing with the worst-case scenario? You don’t currently have much money saved up, and your credit score isn’t the best, either. In these types of situations, a bad credit personal loan can be a lifesaver.

How Bad Credit Personal Loans Work

financial managementThe process for obtaining a bad credit personal loan is simple and convenient, just what you need when time is of the essence. All you need to do is fill out a brief form with some personal information. It typically takes only a few minutes to complete the form, and then your loan request can be processed and approved just as quickly. Even if you have a bad credit score, you’ll still be able to get a loan.

You may be wondering if you’ll need to put some of your property up as collateral to obtain one of these loans. The answer is no. Bad credit personal loans don’t require you to risk your car, home, or anything else you own. When you obtain the loan, you’re providing a personal guarantee that you’ll pay it back, without any collateral attached.

The term length and annual percentage yield (APR) of your loan can vary. Term lengths can range anywhere from three to 60 months, and both shorter and longer terms have their benefits. With a shorter term, you’ll have higher monthly payments, but you’ll end up paying less in interest. A longer term will result in lower monthly payments but more interest.

Using Your Loan

The most important thing to realize about a bad credit personal loan is that you should only be using it for emergencies. Part of being financially responsible is that you don’t overspend and that you don’t take out loans without a good reason.

The easiest way to figure out if you should pay for an expense with a personal loan or not is by deciding if the expense is a want or a need.

You need to keep a roof over your head, so if your rent is due and you’re short on cash, paying it with a personal loan is fine. If you have an unexpected car or home repair, those are also examples of needs. Past-due bills also qualify. If you don’t pay your electric bill, water bill, or another monthly expense, not only will you incur late fees, but the provider could shut off that service.

On the other hand, it’s not smart to use a bad credit personal loan to pay for your vacation to Cabo, a new sound system for your car, or anything else that isn’t essential for your day-to-day life. Poor financial decisions like those can put you in debt for no reason.

Final Thoughts

certified business loansWhat about if you have expenses coming up for your small business, or you’re focusing on expansion and you need additional funding? If that’s the case, look into Certified Business Loans. There are different types of Certified Business Loans so you can find one that fits your needs, whether that’s a cash advance, working capital financing, or an equipment loan.

You don’t need good credit for a Certified Business Loan, because the loan depends on your business’s sale history, not your credit history. This type of loan doesn’t take weeks to obtain like other business loans, either, as you can typically get the money within a few days of your application. You make small, fixed installment payments to pay back your Certified Business Loan, so the loan doesn’t have a major effect on your business’s cash flow. If you’ve been in business for one year or more and you have over $100,000 in annual revenue, a Certified Business Loan is an excellent financing option.