or people who have to deal with a bad credit history, getting financial help can be a big challenge. Today, there are lenders who offer payday loans especially for consumers who can’t get approved for a regular loan because of their poor FICO score.
This article talks about payday loans- their advantages and risks.
Payday loans for Poor Credit
Payday loans are indispensable for people who need to get a loan but are hindered by their poor credit history. Payday loans are also called “quick loans” or “guaranteed loans” because anyone can surely get one at any time despite having bad credit.
Payday loan lenders do not require a lot of documentations from their customers. Generally, one only needs to be of legal age or at least 18 years old to get a payday loan. You must also have a minimum monthly income of $1,500 to be approved. Payday loans do not require the submission of collateral and lenders will not check your credit report when reviewing your loan application. As soon as you get approved, you can obtain the cash you need on the same day without hassle.
Payday Loan Risks
What are the risks involved in acquiring a payday loan? Payday lenders offer only a limited amount of loan to the borrower. Furthermore, these loans are accompanied with high interest rates, much higher than regular loans. This is why it is crucial for the borrower to pay back the loan on time to avoid the high interest fees.
Payday loans are meant to provide assistance for short term financing needs. Needless to say, a borrower should never consider payday loans as a long term solution to bad credit. Consumers are discouraged from using payday loans to pay off debts from other lenders.
Not being able to pay back a payday loan on time could mean big trouble for the borrower. Missing the first month of your due date could cost you a lot. Continuously missing your payments could easily put you in a serious debt situation.
Should you apply for a payday loan every time you’re short on cash? Certainly not! Before acquiring a payday loan, consider other possible alternatives to your needs. It is very important to ensure that you have the resource to pay off the loan on time before submitting your application. If you’re not sure whether you can pay off the loan by your next pay check, you should not get a payday loan. Always consider the possible risks before taking a step.