Very Bad Credit Payday Loans

People with very bad credit are often forced to turn to payday lenders for credit because payday loans are the only kind of loan they can get. A payday loan is a loan is a loan that the borrower is required to pay off on their next payday. Payday lenders may extend such loans if the borrower pays a fee.

Payday lenders will loan to people with very bad credit because of the high interest rates and strict terms applied to payday loans. The high interest rates and strict terms make payday loans a very profitable business. This why there are so many payday lenders in most cities and lots of payday lenders on line.

A wide variety of businesses make payday loans and similar loans to people with very bad credit. Check cashing stores, fast cash stores, pawnshops, check loan stores and other business make these loans. Many such businesses are located in poorer neighborhoods because their customers tend to be lower income people.

Advantages of payday loans

One reason why people take out payday loans is that they are very easy to get. Most payday lenders simply require that a person demonstrate they have a reliable source of income such as a job or government benefit to get a loan. Most payday lenders don’t require a credit or background check from borrowers.

Another reason why people utilize payday loans that the loan process is very fast payday lenders often make a loan decision in just a few minutes. Little paperwork is involved and the process is easy to understand.

Many people prefer payday loans because the payday lender gives the borrower cash as soon as the loan is approved. Individuals who don’t have checking accounts and credit cards often use the cash from payday loans to pay bills and buy groceries and gas.

Disadvantages of payday loans

The biggest disadvantage to payday loans is that they have to be paid back quickly. Most lenders will require of payment of the loan on the borrower’s next payday. Many will extend the repayment period if the borrower pays a fee usually a percentage of the loan.

Another disadvantage to payday loans is that only a few hundred dollars can be borrowed at a time. Many payday lenders limit the amount of the loan to the borrower’s paycheck others only lend amounts under $800.

Some payday lenders also engage in very questionable collection tactics. A few payday lenders will have their employees go to the borrower’s home or workplace and pester them until they pay back the loan. Others will try to garnish the borrower’s salary or income.

Online payday loans

People with very bad credit might be able to get a better deal on short term lending by going online. Many online lenders will provide similar products to payday loans such as cash advances online. These products may come with lower interest rates and better terms than the payday loans a person can get from local lenders. Another advantage to online loans is that the borrower doesn’t have to go a store or other location to get such loans.