You can enjoy the facility of online payday loans even if you have bad credit, because you will most likely get the approval within no time.
The worst disadvantage of a payday loan is that it has a high-interest rate. Mostly, the borrowers with bad credit opt for payday loans and they can create a cycle of debt.
Thus, they have to pay the cost of their bad credit in the form of paying high interest rates. This is because they are seen as high-risk to lenders; therefore, they are charged excessively.
The rates of payday lenders for the borrowers of bad credit scores are 391% APR, or in some cases, it goes higher than that (as much as 2,290%).
Using the Loan for the Wrong Cause
Although payday loans are exclusively meant for emergency purposes, many borrowers utilize this loan for current expenses like paying rent and utility bills, which is unwise.
Difficulty in Managing Monthly Expenses
Your mismanagement in the utilization of payday loans can increase your trouble instead of decrease it. The average earning of a borrower is $30,000 per annum. 58% of such imprudent borrowers get into trouble when they make recurring expenses with payday loans.
Tight Repayment Schedule
The threat of the repayment of payday loans remains impending. Since, in most cases, the online lender has direct access to the borrower’s checking account, they withdraw the installment of the payment of the loan from the borrower’s account, leaving no option for the borrower to pay all other payments.
However, some of the lenders recommended by us are lenient in permitting you to repay the loan on a monthly basis, instead of weekly, with comparatively lesser interest rates.
Not Affordable for Some Individuals
A normal payday loan uses 36% of the borrower’s total income. However, a large number of borrowers can bear only 5% of interest for a loan after covering the basic expenditures.
Loan After Loan Is Needed
Large numbers of payday loan borrowers, almost 80%, have to borrow a fresh loan within a couple of weeks for the repayment of the previous payday loan. It is like creating a vicious cycle of debt where the borrowers are trapped.
Any unexpected circumstance can quickly upset your financial position. In such situations, you can fall back on the payday loan facility. But, the condition is that you must have the capacity to pay back the loan without affecting your expenditures in routine.
The online lending marketplaces we have recommended for you can serve this purpose. You have a choice to go for the option that suits you the most. The procedure to apply for a payday loan is quite simple, and above all, you can get the cash instantly.
The thing that is most important is to review the terms and conditions thoroughly, no matter if it is a payday loan or a short-term personal loan. To avoid regretting it later, pay attention today.
Even borrowers with bad credit can qualify for this type of loan. The rates of interest can be higher than your expectation and affordability. However, you can manage to make it favorable for you if you pay promptly and regularly. With try this wise planning, you can easily avoid paying more than the actual amount due. From our top picks today, we would personally recommend considering MoneyMutual for your money needs.
In addition to MoneyMutual, the following are our favorite options. While some of the below-discussed companies might not offer payday loan facilities, they do have the option of personal loans. You can borrow as little as $250 to as much as $35000 and repay it in easy installments.
If you accept the offer, make sure to pay back the installments timely to avoid any undesired complications. For payments, all you have to do is keep the amount due in your account, and it will automatically be drawn on the decided date.
You start by filling out the form that appears on the website’s home page and then submit it. Soon after that, the platform forwards your request to the lenders. Then, on receiving an offer by the lender, you will have the chance to either accept or decline it.
However, one of the main demerits that becomes a hurdle in the approval of a loan is a low credit score, for which you have to pay a higher interest rate. If your score is good enough, you can get a loan at a lower interest rate and more easily.
The next option is that you may use your credit card to get a cash advance. It depends upon the credit limit of your credit card as to how much cash you can borrow. You are entitled to get the 20% of the existing limit of your card.
The nature of an emergency may be different, but it does exist in one way or the other. One may face an emergency in the form of paying utility bills. Others may have to pay the installment of his car loan to save it from being confiscated.