If you are experiencing financial hardship, you are not alone. Every year, a whopping 12 million people need to take out payday loans. People of all ages and demographics are needing some sort of cash advance such as payday loans for bad credit.
No need to go attend a high priced seminar with some financial guru. What you need is real financial assistance, consider a payday loan with no credit check.
But the problem is if you have a low credit score, finding a loan can become very difficult and stressful. Minimum credit score requirements put people who need the loans the most, in a farther reach from conventional loans.
You can now take a breath of relief as there are many options for payday loans for bad credit nowadays. Check out our guide below on how to find the right payday loan for you so you can get back on your feet.
What Is a Payday Loan?
A payday loan is a no collateral, alternative form of credit that can be accessed quickly, it is a short-term, small-scale and fast form of money for when you are in a pinch and bridges the gap in-between paychecks. Payday loan fees and rates are higher than loans from credit unions or banks and are lent in the agreement that you will pay it back when you receive your next paycheck.
These loans are much easier to attain as there is no credit check, and the only active requirements are;
- Proof of income, size of the payment is limited to your ability to repay.
- Proof of age, 18 or older
- Cannot be in bankruptcy
- Social security number
- Phone number
- Active checking account
- Live in a State where it is legal.
Payday loans are primarily taken out for unexpected emergency purposes, such as a car repair, healthcare bills, credit card, or food costs.
Defying the Myth
All payday lenders are set up to loan to financially irresponsible people, right? Wrong! Just because someone is in financial debt, does not mean that they are irresponsible with their money.
A study found that 69% of people who used small payday loans for bad credit were using the loans to pay for small everyday recurring expenses such as utility bills or rent. A payday loan is an extremely useful tool for those who need short-term fiscal assistance.
Payday loans do get a bad reputation because you have to pay them back all at once, some with an interest rate of up to 400%. This is unlike installment loans, which you can pay back in smaller, more manageable payments. However, with installment loans, you need to have good credit which unfortunately means that they are not accessible to everyone.
The Benefits Of Payday Loans For Bad Credit
Have you been wanting to take your family on a vacation? Or perhaps give your wife the kitchen of her dreams, and just cannot financially make it happen?
Once approved, you can use the money for reasons that you need. Do keep in mind, however, that this is not a forever thing, it is used as a temporary boost to your income. Once you use a payday loan, it is a sure sign that you need to start planning a more secure, financial future.
Online payday loans come in a variety of sizes and have a large number of different features. One of the biggest benefits that separate payday loans from other loans there is no collateral needed.
Many loans require some form of collateral, such as your car, house or another form of value. But no need to worry about losing your car or any other possessions with a payday loan. Just be prepared to pay a higher interest rate in return.
Some other benefits of payday loans include;
- A higher rate of approval. With other loans, if you apply for multiple types, and are constantly getting denied, this can hurt your credit score even more.
- Easy accessibility. You can conveniently request a loan.
- Quick Processing and easy to fill out. Forms are usually straight to the point and only ask for essential information. Approval is almost instantaneous.
- They are confidential. Client’s information is handled professionally, kept confidentially and no personal data would ever be available for unauthorized use.
- Perfect for emergency purposes.
How Do Payday Loans Work?
Say a pipe in your house burst, and you need a quick $300 to fix it. You would write a check to the lender for $300 plus a fixed finance fee that is determined by the amount you borrow, so now it is $340.
The lender gives you the $300 for a set amount of days, usually 14. When that 14th day is up, you would repay the lender $340 in cash, or let them deposit the check. If you are unable to come up with the funds, you would write another postdated check, plus an additional finance fee, now making it $380.
This will keep happening until you are able to pay back the borrowed amount, plus all of the additional fees. This is why it is highly suggested to only borrow what is actually needed, or else you will find yourself in a huge financial pickle.
Want More Information On Payday Loans For Bad Credit?
We at Bonsai credit, understand that personal finance can be confusing and overwhelming. Our ultimate goal is to become your resource for any questions, or financial concerns you may have.
We will always have the latest, most relative information, advice, tools, and services available to you so that you can focus on your own life and what is important to you.
Here’s to your secure financial future.