Advantage & Disadvantage of Bad Credit Loans

Bad credit loan is a type of loan you get even if you have a bad credit history. Bad credit depends upon your history of previous loans with different banks, It is used to determine your credit worthiness. So if you have a bad credit history it means you are not capable of repaying your debts and banks or moneylenders will not provide you with loan. This lead to the concept of bad credit loans.

Advantages of bad credit loans

• Credit history: Biggest benefit of bad credit loan is that you don’t have to worry about your credit history. Banks or moneylender will look for ways you can repay the loan to them and not look at your credit history. 
• Quick: Bad credit loans are approved very quickly than the normal loans, Normal loans take even months to get approved but bad credit loans are quick.
• Fresh Start: Even if you had a bad credit history, you can still improve it and work on it. So if you start timely payments you can improve your credit history and get normal loans also.
• Large amount: You can borrow a large amount through bad credit loans but be sure as interest rate will be high.
• Disadvantages of bad credit loans
• Interest Rate: Obliviously if someone is providing you loan even with your bad credit history, he is taking a big risk therefore he will also charge high interest rate.
• Scams: If there are bad borrowers there can be bad lenders too, there are many scams in money lending industry, especially in bad credit loans, so do a proper check before borrowing money from a money lender.
• One of the biggest disadvantage is if you are not able to pay what you have borrowed you can end up caught in circle from which it is not easy to get out.