Low credit payday loans are short term loans that can be expected to be paid back with the borrower’s pay check.
These loans may also be called payday loans or quick loans because they’re fast, easy, and convenient.
The financial loan process is easy. The borrower can visit the lender’s location, write a postdated check, and then leave with immediate cash on hand. Many payday lending companies also provide loans online where application might be filled-out and submitted online. Once approved, the fund might be delivered to the borrower’s bank checking account via electronic transfer.
Nevertheless, payday loans are known to carry high interest rates and if the borrower fails to pay back the loan on time, it could easily lead to a pile of debt which can be very difficult to pay. Payday loan lenders allow the option to rollover the loan for the next cycle, but the borrower will continue to incur extra fees as long as the debt is not paid in full. As a result, borrowers can fall in the trap of bad debt.
In some States, payday lenders are regulated by State laws.
There is usually a cap or limit to the rate of interest and the fees that lenders can impose on their borrower. However, there are States where lending laws do not apply. Interest rates can range anywhere from 100% to as much as 300% or even higher.
Borrowers must choose their lender carefully to avoid being ripped-off.
It’s very important to check the lending company’s background and reputation as illegal lenders are most likely to violate State laws to make more profit at the expense of borrowers.
Who are eligible to obtain payday loans?
The specific requirements may not be the same with all lenders. Typically, lending companies require borrowers to be at least 18 years of age and to be a legal resident of the US. A stable source of income or regular employment is usually a basis of approval. However, there are payday loan lenders that are more lenient and do not conduct employment check which means anyone can easily get a cash advance even without a stable job.
Should you get a payday loan?
The answer will depend on the situation. Since bad credit payday loans are most likely to carry expensive interest rates and fees, borrowers are advised to consider other possible solutions to their financial problem.
For instance, if you personally know someone who is financially capable to lend you money, you can avoid steep rates and penalty fees. Borrowing from a friend or relative can be a practical solution especially when faced with emergency expenses.
On the other hand, if you decide that acquiring a payday loan is the most practical option, be sure to choose a legitimate lending company. Furthermore, see to it that you will be able to pay back your loan in full and on time to avoid the fees.