Its hard to ignore the fact that far too many Americans are in debt, and dont have any idea what to do about it. Once you get behind on your bills, you get black marks on your credit, and its a fact that the number of Americans with poor credit is definitely rising. So if youve messed up in the past, leaving you with poor credit, are you still able to get a loan?

Well, thats a little bit like asking how long is a piece of string. There are different levels of bad credit, and lenders that specialize in loans for poor credit are well aware of that. They know theyre taking a big risk if they lend you money, so to compensate they charge high interest rates. Some loans offered for people with poor credit can have interest rates of twenty percent or more. Credit card companies may well raise your interest rate to as high as thirty percent if youre late with a couple of payments. The problem is that high interest rates mean higher payments, and it just gets harder and harder for the person in trouble to pay - its an endless downward spiral. And the poor credit history gets worse.

So if youre serious about getting a loan, you will need to accept that your only choice is to look for loans aimed at people with poor credit, and pay the interest rate theyre asking. But be clear about one thing - you MUST be able to make the repayments each month, without fail. The good news is that some loan companies will start to drop your interest rate if you show a good payment record, so its worth searching for those companies when youre looking for a loan. Even if you cant find one, a good payment history will make it easier for you to refinance with another lender further down the track, and so get a better deal. With the Internet, its become a lot easier to do your research and compare the offerings of different loan companies.

One thing you should avoid if at all possible is the type of loan known as a payday loan. These companies will offer you a small sum of money, which you are then expected to pay back when your next paycheck arrives. The problem with these is that their interest rates, when you work them out annually, can be as high as 400%. Its easy not to realize how high the interest charges are, because theyre only for a few days. But its quite possible that youll pay $25 just to borrow $100 for a few days. Youll very quickly find yourself in even more trouble if you take on a payday loan - theyre probably the worst type of loan available for people with poor credit.

Its really important to read all the fine print of the loan contract when taking out a loan. Although almost anyone with poor credit can get a loan if they spend long enough looking, the reality is that many companies take advantage of that desperation, and charge accordingly. Remember, though, that even reputable companies are going to charge you a higher interest rate, simply to cover their risk. You need to try and work out which companies are charging enough to cover their risk, and which ones are just trying to rip you off. Always check the loan company out at the Better Business Bureaus website. Make sure you understand that if you default on a poor credit loan, your chances of getting a loan again will basically dissolve. So be very sure you can afford it before you go ahead.

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