A bad credit loan is a financial loan given to someone with a murky or bad credit history. In most cases when applying for a bank loan or regular loan the party loaning the money will require a credit history of the party requesting the loan. If this party (the latter) has had in the past complications with paying back loans – either the payments were excessively late, if they came at all – this will most likely show up when the loaning party assesses the history of the person to whom they will loan their money. In cases where there are ambiguities or black marks in the credit history, these will most likely effect the outcome of a credit loan application. When this happens those applying for a loan need to seek financial sources that are willing to give a bad credit loan. Obviously these sources do not necessarily supply the same conditions on their loans as would a location, such as a bank, which supply regular loans. In fact a bad credit loan is often accompanied by harsher conditions and higher payments. This is because they are taking a greater risk by supplying someone with a bad credit history with money. From their point of view, the greater the risk the higher the reward. It follows then that a bad credit loan is often steeped with high interest and payback rates. This means that the persons requiring the loan will have to pay back, in total, a much higher sum of money than they would from a regular loan. However, due to financial history regular loans are not open to them. In many cases such interest can reach numbers as high as twenty-three percent. In such loans the amount owing that is accrued increases exponentially at almost a quarter each year. Additionally, as is often the case, a bad credit loan has a stricter and tighter payment schedule and often includes heavy penalties for late payments and payment defaults. Similarly to regular loans whose payments are expected on a timely basis and accrue extra charges when this does not occur, bad credit loans also have this built into their contract and fine print. Nevertheless, unlike regular loans the rates and penalties for delayed payments are drastically higher those with a bad credit loan.