Like many consumers, John piled up credit card debt with the assumption that somehow he’d be able to pay it off. After only a few years he had $15,000 in credit card debt, a car loan, and a mortgage. His household budget was razor-thin and he could barely make his monthly payments. And then he was laid off from his job it wasn’t his fault; he was downsized. He made sure that he paid his mortgage, but he fell behind in his other monthly payments. Soon he had a bad credit rating and collection agencies were calling.

If you are in John’s situation, you need to act quickly to get your household budget under control. Perhaps you have tried to negotiate with your credit card lenders and you have cut down on expenses. You need more help, and you are considering a personal loan. But can you get a personal loan if you have bad credit?

If you think you need a personal loan quick and you have bad credit, you need to be extremely careful. Here are a few of your options.

1. Payday loans can provide quick short-term cash. Payday loans are unsecured loans for amounts up to $2,000, generally to be repaid on your next payday. To qualify you need a monthly income such as wages from a job, Social Security, unemployment, or even disability insurance checks. Your income must be direct-deposited into a bank account that has been open for over sixty days.

Interest rates are extremely high (typically 500% APR) and when the loan is due the lender will electronically withdraw the funds from your bank account. If you don’t have the money and can’t repay the loan on time, you will be liable for significant fees. Payday loans should never to be used to pay off other debt.

2. Unsecured personal loans are available from banks and loan companies, and differ from payday loans in several ways. The loan amounts can be greater, up to $25,000 or more, and the repayment times can be as long as 60 months. Interest rates are lower than short-term payday loans but higher than secured loans.

For example, a secured loan such as a car loan or mortgage will cost you between zero percent (for some new car loans) and 8%. These rates fluctuate with the economy; a decade ago mortgage rates were 15%. An unsecured personal loan will typically cost between 15% and 20% or more, depending upon your credit. If you have bad credit, you will pay a higher interest rate.

3. Secured loans are a possibility if you have bad credit but you own a significant asset such as a house or vehicle. To get a secured loan you must put up the asset as collateral, and you sign a contract. If you default on your loan payments your lender can legally take your asset your home or car.

Because the secured loan is backed by something of value, interest rates are lower than unsecured loans. Even if you have bad credit you may be able to get a secured loan such as a second mortgage or home equity loan. The lender will examine your finances and review your credit history before deciding to give you a loan and determining how much interest to charge. The better your credit, the lower rate you will pay.

Let’s say that despite your bad credit you’ve been paying your mortgage for ten years and have built up equity in your home. Your credit card debts equal $15,000. You could take out a thirty-year second mortgage for $15,000 and pay off your credit card debt. The interest rate on the second mortgage is 8%, much lower than the 26% you are probably being charged by your credit card companies. Instead of having minimum payments of $500 each month, your payments on the second mortgage are $110 each month. Of course, you must be very careful because you have swapped unsecured debt your credit cards-for secured debt. If you fail to make the payments on your second mortgage, you could face foreclosure.

When in doubt consult a qualified and professional personal finance counselor, and always try to live within your means.