The first thing you need to do is make sure that you know your options for personal loans. Personal Loans are of various types, mainly Secured Personal Loans and Unsecured Personal Loans.

Secured Personal Loans: These are given by the lender upon the pledge of collateral by the borrower to secure the loan- like property, or a car. Subsequently as the lender stands to recover his money if there is any default in repayment, the rate of interest charged on the loan is less.
Unsecured Personal Loans. The loans are given to the borrower with no pledge of collateral or security. As the lender faces a very high risk of losing his money should the borrower default on repayment, the interest rate is quite high.

Unsecured Bad Credit Personal Loan: Here again the borrower with a history of bad credit rating is being given a loan without forwarding any collateral on his part. All the lender has is the borrower’s signed promise to repay the loan. Therefore such personal loans are also called signature loans. Signature loans would be issued in full entirety upon the receipt of a signed activation letter or a letter of commitment from the prospective borrower. Consequently to protect the lender’s money, the rate of interest charged would be high.

Guaranteed Personal Loan: A guaranteed personal loan comes with a requirement from the lender that the borrower must be having a certain level of income and a good credit rating. He should provide the lender with sufficient proof of his ability to make the repayment.