What are High Risk Personal Loans?

High risk personal loans are extended to borrowers with poor credit who need funds immediately. The loans can be used to pay off an existing debt load or pay for an emergency expense. As the name implies, the loans are risky for both lenders and borrowers.

Advantages

Borrowers with poor credit face difficulty securing a loan. High risk personal loans may be one of the only options these borrowers have. Additionally, if you have bad credit, you can rebuild your credit by making regular payments on your new loan. Repairing a bad credit history is a long and hard road. Paying off a high risk loan can get you there faster.

Disadvantages

Few lenders are willing to hand out high risk personal loans. Those lenders that do approve these loans do so with high rates and fees. While you usually do not need to post collateral, if you default on a high risk loan the result can be fiscally detrimental. 

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