Bad credit loans are loans that are given to individuals who have a bad credit record with Transunion or Experian. Normally the reason why a creditor will approve this type of a loan is because the applicant has revealed that he/she is in debt and may want to consolidate all loans.
Bad credit loans are seen by many as irresponsible lending but this is not always correct. For instance a person might apply for this type of a loan because they want to consolidate all their loans. This makes it much easier for people who are over-indebted to manage their finances while they are paying their loans back.
There are many creditors who offer bad credit loans in South Africa. Although it might not be easy to find one in your area but this will not mean there are not there. The best way most people use to find one is to search for them online.
Bad credit loans are a bit expensive than normal loans simple because the creditor is worried about the risk involved. They normally take into consideration that you might not be able to afford this loan. In most cases creditors will take insurance for the loan on your behalf which makes the interest a bit higher.
Another reason for bad credit loans to be expensive is the fact that they are not offered by big banks or institutions in South Africa. They are instead offered by smaller organisations that might not have capital flexibility like big banks.
The National Credit Regulator offers advises to people who are over-indebted and it is always advisable to check their services before applying for your loan. This will help you know all your rights before you make your decision.