Before the advent of credit cards, small loans were often signature loans. These loans relied on the character of the applicant instead of any collateral. But with the introduction of plastic money and higher interest rates, bankers pushed the cards instead of the loans since the cards made them more money.

Although bad credit signature loans may not be so good for the bank, they're better for you. Their scheduled payments helps you repay the money in a timely manner, so you're not saddled with excessive interest costs. The interest rates are usually reasonable, though probably more than a home equity loan.

The first place you should try to secure bad credit signature loans is through credit unions. They're easier to work with than banks and have the same or better rates. And if the loan is less than $500, many credit unions will make the loan with minimal credit. Although usually signature loans are unsecured, if the loan is for several thousand dollars or more and your credit is shaky, collateral may be required.

And just because your credit may not be the best, doesn't mean you have accept any loan offer. Make sure the cost of the loan is reasonable. See what the total loan cost is, not just the monthly payments. The law requires that all loan fees be shown in the loan documents. Don't assume that any of the fees are automatically necessary to get a signature loan. If they are excessive, try somewhere else.