Bad Credit Personal Loans: Are They Worth It?

Even the best of us fall on hard times. If you lose your job, the bills keep coming, and the stress of taking care of your family while keeping the bills paid can be overwhelming. Even with unemployment benefits through Centrelink, it is so easy to fall behind a mountain of debt.

As your bills continue to go unpaid and pile up, it can have a seriously negative impact on your credit score. Bad credit means it’s even harder to get loans and financial assistance to get caught up, and before you know it you’ve come full circle. The cycle can seem never ending, and in desperation many people turn to personal loans specifically geared towards people with bad credit.

Of course, this can sometimes be a catch22 as well. While it’s tempting to apply for a fast loan to put cash in your pocket quick, these loans can sometimes come at a steep price. When you look into loans geared specifically towards people with bad credit, be wary of large down payments and steep interest rates.

Loans for people on Centrelink may be the only option they have for getting back on top of their expenses though, and if that’s the case, it’s an option worth considering. If you can get all of your bills paid and debts off your back with one consolidation loan, you may just be able to get back on top of things.

The key here is to make sure your monthly payments are reasonable enough, so that you don’t end up in the same situation you were before. Defaulting on a quick cash loan can have some serious consequences to your credit, so only consolidate if you can afford to.

Though Centrelink in Australia is definitely a godsend for those who need it, it just isn’t a cure all, and you’re not always given enough benefits to cover flexible expenses like groceries and fuel. If you’re up to date on your utilities and house payments, getting a fast line of credit through a quick cash loan program is actually pretty convenient.

If you keep your payments low, and take care of the balance relatively quickly, you can avoid the high interest rates that so often come with bad credit loans. At the same time, you can build positive credit history, which will help to raise your credit score. You’ll be able to get larger amounts of credit, lower interests rates, and even lower down payments eventually.

Another thing to keep in mind for cash loans for people with bad credit is that the number of times you apply, or even just check your credit score, can have a negative impact on your credit rating. Take the time to research loans for people in your specific situation before filling out dozens of applications. In the end, you’ll get only the personal loans that are best for you, and you’ll save your already bad credit score from taking another hit.

The unfortunate thing is, when people are unemployed and dealing with bad or no credit, they’re not in much of a position to bargain, and that’s something a lot of these fast cash loan companies know all too well. You’re going to have to make compromises left and right to get the cash you need to get caught up. Your interest rates are probably going to be sky high, and it’s very likely that for a personal loan you’ll be required to put down around 30% to secure the credit line.

I know it’s scary, and it just sucks to be in that position. Take a deep breath, sit down, and know you can get out of this. Even with Centrelink benefits, it’s hard to get by. Do what you have to do to provide for your family, and make smart choices, not fast ones.

Loans for people with bad credit are often plagued with gimmicky marketing, and are notoriously run by sharks that want to skim even more money off of people that are clearly down on their luck. Know that going in, and go into educated and prepared.

Figure out what you can afford for monthly payments on a personal loan, and for goodness sake don’t forget to factor in that interest. If you can afford enough of a loan to get back on top of things, do it. If the payments are just too high, don’t dig yourself in any deeper.

Loans for Australians with bad credit can be a saving grace, but they can also be a catastrophic financial trap. Having bad credit isn’t the end of the world – don’t let them convince you it is.