Personal loans for people with bad credit history carry higher risk compared to those loans that financial companies or money lenders grant people with good credit records. Loan sharks are companies and individuals that offer personal loans for people with bad credit history, these loan sharks charge high interest rates to the extent where the loan seekers end up three or four times the actual amount borrowed.
Loan sharks or money lenders assess an applicant’s monthly income to determine whether or not they can be able to pay back a loan, the applicant’s salary determines the amount of money they are most likely to qualify for. Personal loans for people with bad credit history are not different from other personal loans as they are all unsecured loans therefore a person doesn’t have to produce any collateral for them to qualify for these types of loans.
The interest rates that loan shacks charge for personal loans for people with bad credit records are not fixed therefore the longer the period of time that a person takes to pay back the loan the higher in the interest. People are advised to refrain from borrowing money from loan sharks because most of these money lenders use unethical business practices and charge unreasonable interest rates. Loan seekers and money lenders have to agree on the payment methods of a personal loan before the loan application is finalised.