In the past few years, many Americans have been struggling with their personal finances. This led them to get trapped in bad credit. Because of this, it is no surprise that most of these people are trying to find ways to meet their needs.

They have two options to do this. One is by obtaining a bad credit unsecured personal loan. Another is getting a credit check payday loan. Before choosing from these two, it is important to thoroughly understand their difference.

It is highly advised that careful research is done before choosing a lender that gives loan to people with bad credit. Together with this, the borrower must also understand the process in lending. Researching carefully and understanding the lending process can help cut loan costs, fees and interest rates.

Unsecured personal loan obtained by borrowers with bad credit requires a credit check from the lenders. This is the lender’s way to determine the amount of interest to be charged from the amount of loan. Usually, an interest rate of at least 20% is charged to loans of borrowers with poor credit standing.

There are instances when lenders do not require a credit check. This type of loan is known as payday loan. Lenders compensate for the lack of credit check by charging additional upfront fees. The average range of these fees is $15 to $35 for every $100 borrowed. Take note that this amount is charged over and over again each time a borrower receives a paycheck but do not give a full payment for the loan amount.

Before taking any of these two loans, always be prepared with a plan on where to get the payment. Without it, the financial condition can become much worse. It can lead to more and more debt that can become very difficult to settle.

more information on personal loans and paydayloans:

http://en.wikipedia.org/wiki/Payday_loan

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm

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