It's happened to almost everyone at one time or another. Unexpected expenses come up and there's no paycheck left after paying all the regular bills. The answer for many is to obtain a signature or unsecured personal loan. These types of loans are used by many people but especially those with a bad credit history.

Bad credit is something that can be just overspending on your part. This is the typical attitude of many who see people in a tough financial situation. There are many more however where through no fault of their own, there's been a financial set back like a job loss. Or a child needs to go to the hospital and we all know that insurance, even when it is available doesn't cover near enough of the cost. Or how about the unexpected bills that show up when we least expect it. These are inconveniences for some but many people especially at the lower income ranges simply don't have the money cushion available to get through emergencies.

Back to the bad credit loans. Those payday type lending companies charge a heck of a lot of interest. Don't be fooled into thinking that you can afford the monthly payment. This is a common tactic to get you to agree to making those payments. What they don't explain well however, is that a large proportion of that payment is actually going to interest.

While these loans of last resort may seem like a quick way out of your money problems, they are more likely a trap to keep you in debt longer to those companies. Consider all other options before getting a bad credit loan.

Here are a few ideas:

1. Sell property. If you have things you've bought that you don't need any longer, sell them. Use EBay or a garage sale but get rid of the accumulation of stuff.

2. Work a part time job. Not my favorite but a part time pizza delivery job will get you out of debt much faster than a typical bad credit loan. And remember this possibility is just temporary until you get back on your financial feet.

3. Work out different payment options with your creditors. Mortgage companies do not want to foreclose on your home, and banks don't want to repossess your car. Bottom line is they want their money and interest. They would much prefer that you contact them directly and work out a payment plan based on your current situation then having you later quit making all payments. Contact your credit card companies and do the same. These people will also work with you. Remember however, that once you agree to something, it's important that you keep your word and deliver on those promises. This means don't promise anything you can't do.

Is your usually payment 100 dollars but you can only afford 50 and you're behind a couple of months? You should actually call the creditor first instead of having them make the first contact. Still, once on the phone, don't promise to catch up and make full payments if you cannot afford to do so. It destroys your credibility. Being behind makes you someone with a problem. Promising and not delivering makes you a liar.

There are other strategies that although uncomfortable can be used instead of a bad credit loan. Exhaust all possible options before committing to a loan from a lender of last resort.