For anyone with a bad credit rating, applying for bad credit loans can seem to be nothing but confusing. After all, with many disreputable companies offering bad credit loans, how do you know you are choosing one that is reputable?

Outrageously high interest rates — Make sure you know what the current interest rates are for those who have good credit, and then compare them against the interest rates you are being offered. If a company is offering you a bad credit loan with a 30 percent interest rate, for instance, you are all but guaranteed that company is less than reputable.

The more reputable companies will offer you a loan with a high interest rate, but not so high you have no chance of repaying the loan.

Companies that check your credit rating — Never accept a loan from a company that does not check your credit rating. Every reputable lending institution will check your credit rating before they offer you a loan. An institution that does not is not one you should trust.

A lending institution offering soft credit checks — Some lending companies do what is called a hard credit check before they offer you a loan. This is a type of credit check that will damage your credit rating even more, and could even force you into not being able to get a personal loan at all.

When asking any lending institution for a loan, make sure they only do soft credit checks. These are perfectly acceptable, and do not damage your credit rating, no matter how many of them are done.

Long-term repayment terms — Most people that need bad credit loans cannot afford to repay the loan they are given in just a few days. This is why you need to be sure the company whose loan you accept allows repayment over several months or even longer.

Avoid companies giving you bad credit loans and then telling you it must be repaid in seven or 15 days. This is a good sign you would be accepting money from a company that delights in cheating its clients.

Credit unions offer good terms and lower interest rates — While you may be tempted to apply for bad credit loans from a bad credit loans company in New Zealand, you may find you can get better terms from a credit union instead.

Look at credit unions in your area, and compare the rates they are offering for bad credit loans against those of other institutions. If you find their interest rates are lower than online lending institutions, and their repayment terms are better, opening a new account with a credit union could just be your best bet.

If you follow these quick tips when applying for bad credit loans, you are much more likely to have a good experience and end up with a loan you can actually afford to repay.