Having low credit score, opposite to high score- the one that everyone is after, implies a potentially high interest rate. In addition, if the loan is secure, even with a low credit, the interest rate is still affordable, as there is always the collateral which, in a way, reduces the risk involved for the lender, compensating to a certain degree, for the far greater risk of giving the loan to someone with both a bad credit, as well as having no supporting collateral. This is the case with unsecured loans, named like this due to the very fact that they lack collateral. This is reflected and is the cause for the interest rate to exceed your expectation, as the risk involved here is impossible to be overlooked.

Thus, without collateral to backup your credit score, if a poor one, then you have every reason to be saving for money for the payments, as the interest rate will be very high. This also depends on how exactly low your credit really is, as distinction has to be made between a person that has a low score due to late payments, as opposite to say someone with a past bankruptcy. Your score and your credit history will still define how high or low the interest rate will be. In other words, for your lender, the more risk involved, the higher the interest rate has to be in order to compensate for the probable loses, which the bank will “deal with”.

To obtain a lower interest rate you will want to improve your credit score. As you improve your credit score you can qualify for a lower interest rate.