An instant payday loan becomes necessary when an individual has missed or made late payments on one or more credit agreements. Creditors will report any indiscretions to the leading credit reference agencies (Experian, Equifax and TransUnion) which can mean that a number of borrowers are no longer eligible for mainstream lending products. A bad credit rating loan is a source of short-term borrowing for an individual seeking to avoid credit scoring. It is possible to renew the loan at the end of the term, but it isn’t a recommended long-term loan.
Instant Payday Loan Eligibility Criteria
As already alluded to above, eligibility for payday cash loans isn’t a result of credit scoring. The decision will be based on a simple checklist rather than the individual’s repayment history. The borrower should be a U.S. citizen, at least 18 years old, have a full-time job, a valid checking account and be able to provide two forms of photo identification. Comply with these criteria and a bad credit rating loan is guaranteed for all applicants.
How Payday Cash Loans Work
The borrower provides a post-dated check (equivalent to the principal and any accumulated interest) which coincides with the date the individual is paid. The cost of borrowing is normally $20 to $25 per month for each $100. Although the loan will only last for a full calendar month, those who qualify will be able to borrow money with bad credit in just 15 to 20 minutes. The application process is very straight-forward.
Instant Payday Loans and Affordability
A very bad credit loan without credit scoring will always be more expensive than a conventional loan. No bank will offer an unsecured small loan as it would be deemed too great a risk. Consequently, a customer who wishes to borrow $500 will repay about $600 to $625 just 30 days later. Anyone who borrows money at this rate of interest must have a way of bridging the monetary shortfall (via a bonus or by working over-time) the month afterwards.
Alternatives to Adverse Credit Loans
Whilst an instant payday loan could provide the answer to a short-term borrowing need, they aren’t suitable for everyone. Those who are not in full-time employment will be rejected, but may be able to get a pawn shop loan if able to provide suitable collateral. A very bad credit loan is not appropriate for debt consolidation. However, those who are struggling to keep-up with repayments on various unsecured credit obligations may be able to clear debt with debt settlement program or debt management plan.
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