It might read like a shock tactic,
but the headline above is accurate when the circumstances of many people are
taken into account. For most of us, a fast loan of $1,500 can be enough to
clear critical debts just as the pressure is becoming too much to cope with.
Through payday loans, this kind of sum is possible to get, fast and with the
minimum of complications.
With the state of the national
economy, it is not very difficult to find ourselves with a poor credit rating.
This directly affects our chances of getting approval on a loan, so if a sudden
financial emergency crops up, life can become extremely difficult. The fact
that payday loans for those with bad credit are easily accessible means that
these emergencies can actually be dealt with immediately.
Of course, no loans are free and
there are specific terms that should be checked out before anything is signed.
However, since they are loans approved against pay checks, compromise also
needs to be made.
Payday Loans Explained
In case the idea of a payday loan is
a little unclear, we will explain. The mechanics of it are actually quite
straight forward, with the loan approval based on an upcoming pay day - thus
the name. Repayments of the loan are generally 14 to 30 days, but can sometimes
be extended to 90 days.
Since the only item of real interest
to payday loan lenders is the paycheck, there is never any reason to check the
credit history of the applicant. This is one of the big advantages of payday
loans for those with bad credit ratings, with the fact that approval can be
given and monies received within 24 hours.
With everything happening so
quickly, it is important that all of the necessary documentation is properly in
order, but as loans approved against pay checks the chief concerns are proof of
employment and confirmation on monthly income.
Points to Consider
Nothing is for free, and this is
especially true when it comes to financing. The fact is that while payday loans
may be fast to get, they are quite expensive in terms of the interest rate
charged.
The high rate is down to two
reasons. Firstly, because a credit check is not applied, there is a larger
perceived risk to the deal from the point of view of the lender. Secondly, the
term of the loan is short, so the high rate is to ensure the highest profit
possible can be made.
The principal point about payday
loans for those with bad credit, is that the loan usually needs to be repaid in
full very quickly. And like all loans approved against pay checks, the full
amount may be taken from your income. That could leave very little with which
to pay other monthly bills and debts.
