• There are benefits to bad credit personal loans.money image by Bradlee Mauer from Fotolia.com
  
  Bad-credit personal loans can carry high costs. The interest rate is typically much higher than someone with good credit would pay and they may carry other stipulations, such as a pre-payment penalty that prevents you from paying off the loan early and an interest rate hike if you make a late payment. Still, in certain situations, it could be good to get a bad-credit personal loan.
  
  

Debt Consolidation

• If you are paying off several debts, it can be difficult to keep track of all the due dates. Through a personal loan, you can pay off your debts and then you'll only have one debt to pay each month. For many people, paying one large loan is easier than paying several smaller ones.
  
  

Covering Unexpected Expenses

• You may be facing an unexpected expense--you suddenly become ill and can't earn money or your car breaks down and you can't get to work, for example. You need to immediately address these expenses, but without a credit card or a savings account, you'll need a loan to do it. A bad-credit personal loan can help you get through the tough times, though you must take care to pay it back as quickly as possible.
  
  

Improving Credit Score

• Assuming you make timely payments, a bad-credit loan can help you to improve your credit score. This is especially true if you are using it to consolidate debts that you were previously late in paying. For the bad-credit loan to improve your score, you must take care to always make your payments on time.
  
  

Lowering Interest Rates

• Though bad-credit loans often have high interest rates, those rates could be lower than the ones that you currently have on your debts. If your debts have interest rates higher than 25 percent, look into bad-credit loan rates to see if applying could get you a better deal. Then, you pay off the high interest loans with the bad-credit loan and only have one to pay off.