Bad credit can make tough times tougher. Especially when an emergency arises and emergencies can happen to anyone. Whether it is a job loss, a medical emergency, or a car repair, at one time or another everyone needs a personal loan at sometime.

So where do these good individuals with bad credit turn? Some turn to their families and friends, but too often this resource is already tapped out. If they are unable to get a salary advance from their employer, they search desperately for other options.

What they need is an unsecured personal loan and they need it fast. The most popular and widely available unsecured personal loan is the payday loan. Payday lenders lend small amounts for a short period of time and don’t require a credit check at all. But there are downsides to the payday loans. For one thing, the amounts are usually limited to under $500, secondly the interest rates are outrageous, ranging from 300% to 1500% as annual percentage rate.

Aside from the high interest rates, the other disadvantage of payday loans is the very short term of the loan. Often individuals who need a quick loan are living paycheck to paycheck before the emergency occurred. So on payday when the loan comes due, they renew the loan, and the interest keeps mounting. Recent publicity about the predatory lending practices of many payday lenders have encouraged more institutions to offer short-term loans

Credit unions were the first to rush in and offer short-term loans to their members. Other institutions, such as banks and savings and loans are beginning to offer these loans to their banking clients. There are several advantages to getting a loan from a credit union, bank or savings and loan. First, the interest rates they charge are far less than those offered by payday loan companies. Second, these institutions extend the repayment period from two weeks to usually around 90 days—making it far easier for the borrower to repay the loan without having to take out another loan. Finally, credit unions, banks and savings and loans limit the number of short-term loans their clients can get in a year.

The most important thing for individuals with bad credit to do when an emergency arises and need a personal loan, is to explore all the options and find the best one for the long term.