But if he receives a letter expressing sorrow for a rejected application, he is bound to be perplexed if not downright outraged. The reason for rejection might lie not in the immediate present but in the past – the unpaid bills, the defaulted or late payment of credit card dues etc. may have cast a shadow over the prospects of getting a loan.

These delays and defaults are regularly reported to credit bureaus and are added to your credit history. To lending firms, they are nothing less than red flags as a bad credit history is, in other words, a record of you being an unreliable and risky investment.

But that does not mean that doors of all lenders are closed. There are companies that are willing to give you loans but against a higher interest rate. This is logical as your past record points you as higher risk investment prospect and if you are able to convince the lender by your other credentials such as steady job and good salary, the chance of your getting a bad credit loan becomes high. Let's discuss some of these loans.

Home financing

Since real estate loans come under secured loan category, arranging bad credit finance is not all that difficult if you can prove that you have a steady and good income source, and you can arrange for good down payment besides providing references of former landlords.

You can search online by typing the keyword bad credit home loans and you will get hundreds of lenders willing to provide bad credit loans. But some of them may be fly by night operators so do an extensive research before you finalize one.

Vehicle financing

When it comes to bad credit vehicle financing, the banks stay out. But you can approach a finance company which may lend you the requisite cash depending on the type of vehicle, your insurance and driving record, your annual and monthly income, any recommendations or referrals that you might provide.

Other financing

Things become a little difficult when it comes to personal loans as there is no asset to cover for the loan as in case of real estate or auto loans. In this case one can opt for secured personal loan where some asset owned by you is provide as security for the loan amount. In case of unsecured personal loan you need to have really good job at really good place backed by references to convince a lender to borrow you some money.

Payday loans for bad credit

There is one more option available – the bad credit payday loans which is surprisingly fast and hassle free, if your need is small and only for short term. These loans are available to everybody regardless of the credit history and approval is granted very fast (within minutes of filling up an online form). The money gets credited straight into account within 24-48 hrs. Besides, there is no paperwork involved and thus payday loans for bad credit are great solution for meeting emergency needs.

The tenure of bad credit payday loans is short (2-3 weeks) and there is deferral facility available for a fee if one can't repay the loan on designated date though one should not make deferral a habit as interest rate is higher and one can get entangled into debt spiral if is not careful in managing the loan.