People who have bad credit may panic when encountering an emergency expense that needs to be paid immediately. If there are no funds available to pay for the expense, how can a person with bad credit take care of the problem? Payday loans are designed to be the perfect option for people with bad credit. Approval is based on income, so past problems with debt and poor credit are not an issue.
Guaranteed Approval for Bad Credit
Many people with bad credit have difficulty securing financing when in need of a loan. Traditional lenders tend to turn down people with bad credit because of the risk associated with lending to people with poor credit history. The difference between a traditional loan and a payday loan is that a payday loan is a short term loan that is based on the income of the borrower. There are no long term payments and often no credit check is needed. Lenders do not worry about the borrower’s past credit history because the amount that is being lent is based on income and is intended to be paid off when the borrower gets paid.
The borrower only needs proof of steady income and an established bank account to be approved for a payday loan. Negative credit history should not deter a potential borrower from applying since credit is not a factor in the approval decision.
Get Money Fast
People often have to wait days or weeks for the money borrowed through a traditional loan to reach their bank account. A payday loan can lead to money in a bank account as soon as approval is completed. Approval can often be completed in minutes, and the money is available as soon as the bank clears the deposit. Some banks may even allow a person to access the funds the same business day.
Avoid Long Term Loans
Even if a person with bad credit is able to obtain a loan, the interest rate will be extremely high. A traditional loan is for a large amount of money that will be paid off over several months or years. The interest on a bad credit loan quickly adds up on a large loan. Payday loans are a much more affordable option for people with bad credit because they are short term and involve a flat rate fee rather than an annual interest rate.
The short term nature of a payday loan also allows people with bad credit to properly budget for paying back the loan without having to worry about several payments that may be difficult to make. The lender is aware that the borrower is able to pay off the loan based on income, and the entire payment is typically expected the next time the borrower is paid by an employer.
Stay Out of Trouble with Payday Loans
A person with bad credit may be afraid to borrow money because of the possibility of mounting debt leading to difficulty making payments. The last thing a person in this situation needs is another reason to have a negative mark on their credit history. Fortunately, payday loans are short term, small loans that are based on the income of the individual. The amount that can be borrowed is determined by income, so the borrower can be sure that there will be enough money available to pay off the loan in full and on time.
Anyone with bad credit should consider a payday loan for their emergency financing needs. The short term nature of the loan and the fact that it is based on current income keeps people from borrowing more than they can afford to pay back. No credit check is required, and money can be deposited into a bank account in as little as one business day.