$1K-$10K Unsecured Personal Signature Loans – Bad Credit in Philadelphia, Pa

For the state of Pennsylvania we will start with borrowers requesting unsecured personal loans between $1000 and $10,000 (in Philadelphia). Of course, it only makes sense that we would cover this largest PA city first. We have four different loans to discuss in this publication. One for $3000, one for $5000, one for $7000, and one for $10,000, respectively.

Due to the fact that we are talking about the approval of purely 100% unsecured personal loans, with absolutely no collateral or security on the note, the APR levels reflect the risk that the lenders are taking.

The $3000 loan was finalized at an APR of 25%, while the $5000 loan was finalized at a 33% APR, the $7000 loan finalized at an APR of 22%, and finally, the $10,000 loan was approved at an interest rate of 43%.

Recently we looked at what banks are doing in the unsecured lending sector (of lending products), and most big banks are now (at the time of this writing) only funding and approving about 1% to 3% in unsecured products, as compared with what they used to lend out in unsecured funds. Before the market crash of 2008/2009 there were many lenders and banks (and credit unions) that were providing unsecured funding for customers in excess of 25% of their business models. This is a dramatic pullback by personal banking establishments, and has left millions of Americans scrambling to try and find some source of unsecured cash.

The reason conventional banks have moved away from the unsecured lending market is because they no longer want to take on the risk, regardless of the high premiums and interest rates they charge on their products. Why – because they were seeing some high percentages in the charge-offs and defaults.

This has left a wide swath of opportunity for payday loan providers and cash advance companies, and they have certainly taken advantage of this. Many different borrowers are now trying to find unsecured loans with peer to peer websites, and private lending institutions still willing to provide high risk loans to consumers who need/want debt consolidation, an rv loan, boat loan, home loan, student loan, and all-purpose loans. Of course, these high risk lending entities charge higher and higher interest rates as time goes on because they know they don’t have any competition from the major banks and lending houses. This puts many consumers at a disadvantage, in that they can’t really find low interest deals anymore.

Some of the lenders (that we allow access to our database) do provide loans with reasonable interest rates, but there are still some that only offer interest rates exceeding 25% APR. This is why we encourage applicants to not just except any loan offer they are proffered, and to shop around for the lowest interest rates possible – otherwise they just end up furthering their bad high interest debt into the future, which can lead to personal bankruptcy and a temporary financial ruin. The key word here is temporary, and that has to be kept in mind if you are in financial trouble. We always tell applicants who have poor credit ratings to remember that their financial situation is just a temporary state, and with time, patience, and a plan, they can navigate their way out of the nightmare of a bad credit rating and personal financial insolvency.

We try to publish information about those borrowers that find low interest solutions to their financial shortfalls, so that we can encourage people to shop around online and at the local level until they find a willing lender who will give them an unsecured loan.

However, it would be disingenuous if we didn’t publish some of the loans we see approved every month that do actually carry stiff APR, reaching heights of 50%. In some cases, applicants need to borrow money on a short-term basis for only a few weeks or a few months. They are willing to accept high interest rates on their loan product(s), because they are going to be seeing a windfall of cash come their way from some other source in the very near future.

You see many small business owners in this category who are gambling on the hope that they will be earning a substantial amount of money per month in the very near future, enabling them to pay down their high interest debt quickly, and without issue.

Of course, you never want to take out an extremely high APR loan for longer than one year, and you certainly don’t want to take out a high APR loan when there is no chance of paying it off quickly. These are often called hard money loans, but that lending product has been distorted by definition in the last decade due to the new lending nomenclatures we see being created on the Internet. Traditionally, hard money loans are loans that real estate speculators and developers seek out to find a new development or property purchase that they can leverage (or flip) within a matter of months.

We strongly encourage our visitors not to borrow money at these high interest rate levels unless they know for a fact that they will have a windfall of income coming their way during the next year.

With all of this in mind, below are four different loans – applied for, and approved, that carry extremely high interest rates, and they all originate out of Philadelphia, PA.

$2500-$3000 Unsecured Personal Bad Credit Signature Loan in Northeast Philadelphia, PA

Our first high interest loan is an unsecured loan for $3000 over a short term of three months. This borrower requested cash to use for traveling across the country to visit family for the holiday season (December/Christmas) and to pay off some debt which was causing her to get a constant stream of phone calls and nasty letters in her mailbox from collection agencies.

She felt that she could pay off all of her debts and visit her family with a $3000 loan, and she would have enough money from some investments that she was confident in. She had invested $1000 in the stock market six months earlier, and at the time of her application she was 100% confident that she would be able to sell her stock and make a profit of over $7000 within the next month. Of course, this is a gamble, because you never know what can happen on the stock market.

The APR that this borrower asked for was 9%, but the actual finalized interest rate on the $3000 ended up being 25%. This created a monthly payment of $1027 per installment, and a closing fee of $43. The total interest paid to the lender over the three month period came to $125, and this is not really a big deal as long as she pays back the lender in full at the end of three months.

This borrower had a FICO score of 580 at the time of application which certainly put her in the position where she was not going to qualify for an unsecured loan with a conventional lender. When she was applying, she was not aware of this fact, and if she was aware of how bad her credit score was, she could have saved herself a lot of time and aggravation.

Her bank is the Trumark Financial Credit Union on N. 5th St. in Philadelphia, PA. She applied there for a $5000 unsecured loan, and was declined. She then asked for a $3000 loan, which is all she really needed, and was declined for that amount as well. This applicant lives in the Kensington area of Northeast Philadelphia, and also works in the area.

Since her bank wouldn’t approve her for an unsecured loan, she tried to get approved at the PNC Bank on North Broad Street, with the Hyperion Bank on W. Girard Ave., and at the Citizens Bank on W. Lehigh Ave. – none of these banks would approve her for any kind of financing.

The one thing going for this applicant is that she had/has a good full-time job working in a jewelry store in Northeast Philly, kitty- corner to Washington Square. She has been working there for over five years now and loves her job. She gets along great with her employer and her coworkers and they are very happy with her performance as an employee. Because of this, she figured that there would be some lender out there that would approve her for an unsecured loan based on her monthly income only.

Unfortunately, her credit score with TransUnion, Equifax, and Experion, was much too low for any conventional bank to qualify her for approval.

She ended up using our website to apply for an unsecured loan of $3000, and as explained above, she was willing to accept a temporary APR of 25% on the note. The good news is that she ended up selling her stock and making a profit of over $12,000, and was able to easily pay off the $3000 principal and the interest charges of $125.

This lender provides unsecured loans to people who have bad credit ratings and lends money to borrowers exclusively in the State of Pennsylvania, with their highest ratio of loans going to consumers living in the Philadelphia area. The most recent loans they approved at the date of this publication were given to borrowers living in the neighborhoods and areas of Kensington, Fishtown, Fair Hill, Ludlow, Rockledge, Jenkintown, Lawndale, and Willow Grove, all in the Northeast of Philadelphia, PA.

Of course, this lender also approves loans for people who have poor credit in all surrounding areas of Philadelphia, but we chose them for this publication based on the fact that their most recent loans went to people in this area of the city (NE Philly)

$4000-$5000 Bad Credit Unsecured Personal Signature Loan in Northwest Philadelphia, PA

Our next applicant lives in the North West area of Philly. He works as a data entry employee for a company located in downtown Philadelphia. He lives not too far from South Broad Street on Cecil B Moore Avenue in an apartment with his common-law wife of eight years. She is employed as well, and they don’t have any children to support, so his DTI isn’t that outrageous.

At the time of his application he had a DTI number of only .27. Unfortunately, he had some financial trouble because of overspending (and over living), and found himself in the bad books with his creditors. He has a personal loan that he often misses payments on with the Polonia Bank on Spring Garden Street. He also has a Citibank credit card, a PNC Bank Visa card, and a Bank of America Visa card, which he is behind on as well. Most of his debts are credit card debts, and he was looking for some form of debt consolidation.

Just like the first borrower in this application, he was convinced that he would have a substantial amount of cash coming in from a small business venture he had recently started. He was running a skate sharpening business with a close friend of his who is now his partner. He was willing to take out a very high interest loan to clean up all of his personal debt, with the hope that he would be able to pay the loan off in a six-month period. He had initially applied for a $10,000 loan with his bank, but since he had a personal loan of $30,000 with the Polonia Bank he wasn’t able to get approved. He tried to apply at Citibank and with the Bank of America for this $5000 note but was declined.

As you can see in the table below, this borrower was approved for an unsecured loan of $5000 over a six month term, with installment payments of $900 per month (rounded down).

Because of the high interest rate (33%), this loan was finalized with monthly payments for a six month term, with a total of $481. His closing payment, you can see, was at $75. We never did get any follow-up information from the lender or the borrower here so we don’t know how this whole thing played out over time – did he manage to pay off the loan as per the loan agreement? I guess we will never know.

What we do know is that this lender is not agreeable to disclosing allot of information on the loan products they provide to people in the State of Pennsylvania. This is often the case, and we certainly don’t begrudge any lenders (or borrowers) for not being willing to give out their information. We rely on the few lenders and borrowers who don’t mind disclosing some of the data on their business dealings. In this case, we had scant data to work with, and barely just enough data to make a substantial note on the application, the process, the approval, the term, and the finalized APR.

Just like all of our loans discussed here at FUSA, we like to let our readers know some of the areas in the respective city where loans were approved. In this case we are choosing all of the recent loans that were approved in North-West Philadelphia, including borrowers from Francisville, Overbrook, Norristown, Fort Washington, Germantown, Allegheny West, and Brewerytown. All of these loans were unsecured as well, so it seems that this lender is making a great deal of profit charging some substantial interest rates on their products.

Unsecured personal loan providers like this one can make a lot of profit by lending money to people who have bad credit scores, but you always have to keep in mind that they are taking a lot of risk on with these activities. The charge-off rate for this lender is undisclosed so we can’t tell you exactly how many unsecured loans end up not being paid, but we can tell you by looking at all of our data on unsecured loans in the United States – they are probably charging off around 7% of their loans.

This is why they feel they can justify such high interest rates. We should make note that the average amount of money lent out by this lender is between $3500 and $5500. They approve loans up to $100,000, and a minimum of $2000 for short terms, but the vast majority of their loans are between $3500 and $5500 – we have to take our data points from somewhere.

$6000-$7000 Bad Credit Unsecured Personal Signature Loan in Southeast Philadelphia, PA

Our third loan today is in Southeast Philadelphia, and the applicant lives in an area called Hawthorne, which is in the area of South Broad Street and Christian Street in Philly. The lender in this case had it’s most recent loans qualified in these areas – Hawthorne, South Philly East, Pennsport, Southwark, and City Center East.

These loans were all between $6000 and $8000 total. All of these particular loans were unsecured loans as well, keeping with the theme of this publication today. This specific borrower is a woman who was recently separated from her common-law husband, and has fallen behind in the bills because she can’t afford to pay for the lifestyle. She has two children to support and she makes a mere living working at Walmart. She wanted to get a loan for around $10,000, but settled for a loan of $7000 principal in the end.

The interest rate she got from the lender was 22% and it was for a nine month term. The total amount of monies paid back to the lender was $7640 over the term, with a monthly installment payment of $837. The closing fee on the loan was $104.68. A fairly good chunk of interest paid on this loan, but nothing that can’t be handled if she manages to raise some money outside of her monthly income that she gets from Walmart.

The reason she was comfortable taking out this kind of a loan (with a high interest rate) is because she was promised some interest free money from her parents within the next two years. Her parents promised to pay her $1500 a month for the next two years, but she needed to get some fast cash right away so she could pay off her Visa cards which were starting to get out of hand.

She does all of her banking at PNC Bank on Christian Street, but also has a credit card with United Savings Bank on S. 10th St. in Philadelphia. She tried to get approved with these banks for an unsecured loan of $10,000 but because of her income being so low she couldn’t qualify for approval. Luckily for her, she had some parents that were willing to help her out, and of course her parents didn’t want to see their grandchildren suffering in poverty, so it was really not a question for them – they could afford it.

The initial APR that she was applying for was 7% on the $7000 principal, but the lender was not willing to go that low for an unsecured note. She had to settle for the 22% APR that was offered, and she had to settle for a nine month term. This lender never provides loans for terms longer than 12 months. This kind of cash has to be paid back quickly, and in fact, this lender prefers to have all loans paid off within a six month period. If you are the borrower, you want to make sure you are paid off quickly too, because with an interest rate over 20% APR you don’t want the cost of the loan growing up to the stratosphere over a long period of time.

As it turned out, everything went according to plan and she did get approved for this loan, and her parents didn’t give her the $1500 a month to pay off the loan and provide food, clothing, and shelter for her two children.

This is one of the lucky ones. So many people don’t have jobs, let alone family members who are willing to give interest free loans. She considered herself very lucky, and works hard to increase her income and decrease her spending every month. She is now taking night classes in accounting so that she can supplement her income from Walmart, and one day become a full time chartered accountant.

$8500-$10,000 Bad Credit Unsecured Personal Signature Loan in Southwest Philadelphia, PA

Our last loan takes place in Southwest Philly, and the lender in this case exclusively does loans that are unsecured in Pennsylvania. This lender’s last customers were living in the areas of New bold, South Philly West, Yeadon, Elmwood, Fitler Square, Drexel Hill, Millbourne, and Kingsessing. This unsecured loan provider works on extremely high yields and high interest rates, and also only allows a maximum term length of one year, and prefers biweekly payments.

In this case the borrower was approved for monthly payments of $1013. Please note the total interest paid on this loan over the year – coming in at $2300 and change. Being that this was an unsecured loan and that the borrower had a 530 FICO score, the lender really stuck it to them with the interest rate of 43%.

Now, you have to question any kind of loan that has an APR as high as 40% to 50%, and you have to ask yourself the question, “How can this borrower afford these kinds of payments on the principle, and how can they afford such a high APR“.

The answer is very simple. This borrower had a DTI of only .23, meaning that they have very little financial responsibilities each month (at the time of borrowing), and they were making over $8500 a month net take-home pay. Of coarse, this brings up the next question, “Why would somebody who makes $8500 a month need to get a loan for $10,000, over a year, with such a high APR“.

The answer to that is very simple as well. This borrower is paying health care costs for his parents (up to $6000 a month), and it was killing him financially. He knew that this was just temporary, but he had to do it anyways – love, and pride in caring for his family.

So his DTI was obviously calculated by lenders and financial institutions without these monthly medical expenses in the equation. He managed to keep that to himself, by using cash money from his accounts to pay for those expenses. The truth is, that this DTI in reality would be about .65, which is much too high for any conventional lender to consider for qualification.

He tried to get approved with his own banks, which were at the time the Bank of America, Citibank, TD Trust, and PNC Bank. He has credit spread all over the place, but not a lot of credit had been racked up at the time. He really had to get this fast $10,000, which he wanted to use as a down payment on a small house, because he was tired of renting and tired of having roommates.

As you can tell by the above information, the data that was given to us by the borrower was sketchy at best. When we see this kind of information coming through we get the feeling that the purpose of the loan is likely not as a documented, but more likely for another reason that they just don’t want to disclose. Fair enough – like we say so often here at Financing-USA.com, it’s none of our business why you need money, how much you want to borrow, where you borrow it from, who you borrow it from, and the interest rates you pay – we’re only here to journal on lending and borrowing throughout the United States.

As it turned out, this borrower got approved for the $10,000 loan and they did manage to pay back the lender on time (and in full) by the end of the year term.