If you have a bad credit rating, it’s impossible to get a loan. In practice, more than 34.2% of people have subprime credit scores, which means that it will be extremely difficult to get an approved loan. If you are one of those people who have subprime credit rating, there is no need to worry. You can still get yourself a loan through payday loans.
THE PROBLEM WITH PERSONAL LOANS
67.4% of families have debts because of personal loans, and there is a reason for it. Banks and other credit companies take into account your credit rating as well as your credit history. That is why they can reject your requests for loans. Timely payment of past bills and loans shows them whether you have outstanding debt. With a bad credit history, your credit rating will look bad and it will be even harder to maintain a good credit rating if your credit history does not allow you to get a loan. This is the main problem of personal loans.
Even if you manage to show your credit history and points well, it may take at least 7 days or even up to one month to get your loan. Despite the fact that you can use a personal loan, having a bad credit, they often come at a steep price and will require you to provide a large security deposit.
However, same day payday loans are different from personal loans in many ways.
Do you need a good credit score?
Applying for a payday loan, there’s no need to have a good credit rating or a good credit history. You must provide a proof of your identity and employment. This is usually the norm when you apply for an unsecured loan. However, when you apply for a secured loan, they may ask you to get a security deposit.
How long does it take to be approved?
In general, payday loans often only take one day to approve. Lenders tend to speed up for the convenience of the borrower. They don’t ask for lots of papers or forms for you to read and sign. Even in the very rare case, when you do not get an approved loan, payday lenders will let you know during the day. Often, you also receive your money on the same day that you apply for a loan.
How long do I have to pay my loans?
You’ll need to repay what you borrowed during the agreed period of time unless you want your account to receive a default and your credit is part of 1.22% of non-performing loans. Lenders will be different in terms of how long you will have to repay your loans, but you can discuss terms and conditions to choose a duration that suits you and your financial situation.
Long term payday loans
There are some lenders who are willing to wait for 3 months so that you can get your loans back. These loans often become payments that require you to only pay interest. These types of payday loans are rare and difficult to meet, since payday lenders are looking for quick returns on their investments.
30-day payday loans
There are also those, who will wait at least 30 days for you to redeem them. 30-day loans often require you to have your loan secured. In most cases, if you are unable to pay your loan within a 30-day period, lenders will provide you with an extension of another month. However, this means that the creditor will temporarily hold his mortgage until you can pay back.
2 week payday loans
The most common creditors agreed deadlines during the payment period. The pay period is the number of days they have before their next salary comes, so they are called “payday loans”. This is most preferable because it is the easiest way to work. It does not impose a lot of stress on the borrower and does not put such a high percentage.
Is there a catch with money?
There is no catch that comes when you apply for loans on the payday. You will need to return it only the next time you receive salary, and there will be no problems. For credit card users, the interest rate can go from 9% to 30% for late payments. However, if you miss a payment, the usual interest rate increases to more than 400%. There are other lenders whose interest rates reach 5,000% when the borrower doesn’t pay on time.
Although the increase may seem high, they represent the annual interest rates of the current contribution that you owe. Considering that the minimum amount of time a lender makes is 2 weeks, this should also not be a problem as long as you pay your dues on time. Lenders accept this to make sure their borrowers not only pay on time, but also let them know about the implications of staying with many payments.
Are there various options that I can choose for a payday?
Yes, you can choose different options if you decide to apply for such loans.
Brick and mortar payday lenders
These are lenders who have a physical outlet that you can enter. These are more traditional lenders that people go to, because they can get a loan on the spot and not have many problems. These outlet are also often selected for safety reasons. A meeting with a lender or a credit company will personally give the borrower a chance to find out where the money they are borrowing come from. The borrower can also issue verified dates in these types of outlets.
Direct online lenders
Several new credit facilities, online payday lenders, offer the borrower the convenience of staying at home to get a loan. These lenders issue their loans using digital means, making it an easier task. They also often display information about their loans online, allowing borrowers to find out where they get their loans from. There are some problems that arise with online lenders. For example, some lenders are not located within your country, often somewhere else. This can lead to some complications when it comes to approving your loan. In addition, being digital, there may be other invisible complications when transactions are processed, which can lead to a loan for 1 or 2 days later.
Do I have to apply for payday?
It depends on certain factors.
- First, you need to know how much you need to borrow and for what reasons you borrow it. Just borrow money for your needs or in case of emergencies, and if you can cover the costs with your salary, you don’t need to worry about applying for a loan.
- Then consider your regular salary. Is the income enough to cover the interest rate when it is time to repay the loan? If this is the case, then go for it, but if this is not the case, and you need funds, then you can consider giving you a security deposit when you apply.
- It is also good to keep in mind that when you apply for a loan on a payday, paying late will cost you more money than you borrowed. Thus, you should always make your top priority to pay back your loans, especially when you apply for a payday loan.
Now you need to know more about payday loans and other things, such as the various options that you have, and interest rates for wages per day with the help of this guide.