If you have bad credit, you may not be eligible to apply for standard loans.
Many lending companies have very strict credit requirements and if you have below average rating, your loan application may get automatically rejected.
What if an immediate need for cash arises? Can you get help for bad credit? What are your options?
Some lending companies today offer short-term loans which are also known as payday loans. Unlike a regular loan, good credit is not a primary requirement in order to obtain a payday loan. Even with bad credit, you can easily get the cash you need as long as you meet the lender’s requirements.
What requirements will that be?
Generally, you need to be at least 18 years old and a resident of the United States to qualify. You must also have an active bank account and must be able to show a proof of income.
Because the process is easy, payday loans are increasingly becoming a popular method of financing. However, the amount available is often limited to a smaller value. In addition, borrowers of payday loans are expected to submit their full payment by the end of the month or by “payday”.
Since financial crisis can arise at the most unexpected times, some of us may need to apply for a payday loan at some point. What should you keep in mind before signing up for a payday loan?
Consider the following pointers:
Check the lender’s reputation.
Not all payday loan lenders in the market are legitimate. It is too easy to create a website and offer payday loans online. Scammers may use this strategy to take advantage of consumers in need. To avoid being ripped-off, you should investigate first if the payday loan lender is licensed and reputable.
Read the fine print.
Get to know the payday loan lender’s terms and conditions. See to it that rules are in compliance with the lending laws of your State. However, the specific rules may vary from State to State. In addition, there are States that are not governed by the lending laws. This is why it’s important to read and understand your payday loan agreement.
Pay back on time.
You should make sure that you will be able to pay back the loan completely on your next paycheck. Keep in mind that payday loans might be a convenient way to get money but these loans are usually accompanied with steep rates of interest and fees. If you fail to pay on time, you could end up paying more on interest rate charges and fees.
Is there another solution to your financial problem? For instance, can you borrow from a friend or family member? If yes, you might be able to save more if you take this alternative rather than obtain a payday loan. IN case you prefer to borrower from someone you know, make sure that the terms of repayment will be written in a documents signed by all parties involved. A written contract can help avoid conflicts or misunderstandings.