There are several things that you need to know if you want to be able to get a loan for payday with poor credit. Payday loans are a short-term loan that you can use to cover unexpected expenses and bridge the gap between your paychecks. It is possible to get a loan for bad credit but it may be difficult to find a lender willing to work with your situation. There are other options to payday loans that might be better suited for your needs.
This blog post will cover basic information about payday loans, and how you can get one, even if your credit is not perfect. We will also discuss other options for payday loans that may be better suited to your needs.
Basics of payday loans.
Payday loans are short-term loan that you can borrow against your next paycheck. Payday loans are usually small (usually $500) and carry extremely high interest rates, sometimes up to 400%.
Payday loans are meant to be paid off in full by your next payday. This can quickly become expensive as both the original loan and the new loan will have fees.
What are the benefits of payday loans?
A payday loan is usually obtained by writing a check. This includes the amount that you wish to borrow and a fee. The lender will give you the cash, but they will keep the check until your next payday.
You can extend your loan beyond the next payday by “rolling over.” This is where you pay another fee to extend your loan’s due date. You will be charged more fees each time you rollover the loan. This makes it harder to repay the debt.
Payday loans: The benefits
Payday loans can be a good option despite the high interest rates and danger of falling into debt trap situations.
Payday loans are easy to qualify for. You don’t have to have good credit to be approved. All you need to prove employment and income (usually in form of pay slips).
* Fast: Most loans are approved within 24 hours.
* They are convenient: Many lenders offer quick approvals and online applications.
How to get payday loans for bad credit.
While most payday lenders require that borrowers have good credit, some specialize in lending to those with poor credit. If you can prove employment and have a steady income, these lenders might be more inclined to lend to you. These lenders can be found online or in the Yellow Pages.
Applying to a payday loan.
You will need basic information to be able to apply for a payday loans. This includes your name, address, telephone number and Social Security number. Also, you will need to prove your income and employment by providing a pay slip from your job.
After a credit check, the lender will deposit the amount into your checking account or cash it to you. A fee will be charged to the loan amount and you will have to pay it back when your next paycheck arrives.
What to Do if you are denied a payday loan?
There are other options if you have bad credit and you are denied a payday loan. A personal loan can be applied for from a bank, credit union, or borrowed money from friends or family.
Alternatives for payday loans.
For borrowers with poor credit who require fast cash, personal loans may be an option. Many online lenders cater to those with poor credit. You can often get approved for a loan provided you have a stable income and a track record of making payments. Although personal loans have higher interest rates than payday loans, they are still lower than other types of debt such as credit cards.
Personal loans also have the advantage that they can be used for any purpose. You can use them to consolidate debts, pay for unexpected expenses or fund a major purchase. Personal loans are usually longer-term than payday loans which require repayment in full within a few months.
A secured credit card may be available to you even if you have poor credit. A secured card allows you to make a deposit which becomes your credit limit. If you default on payments, the issuer will keep your deposit. Although secured cards have higher interest rates and fees than other credit cards, they can be a great way to rebuild your credit. If you make regular payments and keep your balance below your credit limit, you can use them responsibly.
A prepaid debit card can be a better alternative to a traditional credit card if you are unable to get a secured one or don’t want a deposit. The card can be loaded with money and used anywhere debit cards are accepted. You can also reload the card when it runs out. Although prepaid debit cards won’t improve your credit score or help you manage your finances, they can help you avoid overdraft fees and assist in managing your finances.
Loans from friends and family.
Borrowing from friends and family is another option if you have bad credit or need cash fast. Because it is between two people, rather than between a borrower or a financial institution, this type of loan is known as a “peer to peer” loan. Peer-to-peer loans have lower interest rates because there is no intermediary. Peer-to-peer loans are often easier to repay because the loan is from someone you trust. You may be able, for example, to make smaller monthly payments or extend your repayment period if you need.
If you have poor credit and need money quickly, a payday loan could be the right option. Payday loans are available from many lenders, even if one or two of them turn you down. Keep looking until you find a lender who is willing to work with your situation.
There are many other options available if you don’t qualify for a payday loan. These include personal loans, credit cards and loans from friends or family. Each option comes with its own pros and cons so be sure to weigh all options before you make a decision.