Bad Credit Payday Loans

Anybody who has a job or other source of steady income should be able to get a payday loan.

A payday loan, which is also know as an instant loan or cash advance; is a loan in which the borrower’s next paycheck is held as collateral. When the individual takes out the loan they take out an agreement that they will pay the loan off with their next paycheck. Most payday lenders charge a fee usually $15 or $25 with such loans.

Advantages and disadvantages with bad credit payday loans

The advantage to a payday loan is that almost anybody can get one regardless of credit rating. Payday lenders are willing to give such loans because they can charge very high interest rates on them.

The disadvantage is that such loans have to be paid off quickly because they have very high interest. A typical example of a payday loan would be a $200 loan on which the lender charges a $15 fee. If the loan is not repaid in the specified time usually two weeks the borrower has the option of extending it by paying a fee to do so. The fee is usually around 10%. This would be about $20 every two weeks so the payday loan business is very profitable.

Payday loans are easy to get

Many people take out payday loans because they are easiest form of loan to get. They are also the only kind of credit that many people with bad credit can quickly get. Quite a few of those who get such loans end up spending a large percentage of their income to pay them off.

Nobody should take out a payday loan until they’ve exhausted all other possible sources of getting money. There are a number of alternatives that borrowers should look into before turning to payday lenders.

Other options instead of bad credit payday loans

A really good alternative is pawnshops, pawnshops offer better rates of interest and terms. A pawnshop may hold an item for several weeks or months until the loan is paid off. An advantage to the pawnshop is that the borrower has the option of simply leaving if the item with the pawnbroker if they can’t pay off the loan. Pawnshops may also buy gold, jewelry, firearms and collectibles for a reasonable price.

Another alternative some people ignore out of pride is the various programs that governments have to assist those in economic difficulty. Unemployment insurance may give a person a payment of several hundred dollars a month. Anyone who’s out of work should contact their state unemployment insurance agency to see if they qualify and how much they can get.

Food stamps which are now paid in a card can help pay grocery bills for those who qualify. There are also programs that might help pay rent or provide subsidized housing. As well as welfare payments which although not as generous as in the past are still available for those who qualify.

Individuals who are disabled and unable to work may also qualify for Social Security which pays out to the disabled as well as the elderly. Social Security can tell a person if they qualify. People who think they qualify but get turned down can also hire lawyers to appeal that decision.

Finally, there are still jobs available for those who are willing to work. Taking a lower paying job or even a labor job to raise money is still a better deal than a payday loan.