Facing tough times financially and needing a way out? You can get a quick and easy payday loan to solve your problems. But chances are that you’ve already thought of that. Many intending borrowers recognize that payday loans are a good way to get quick funding and meet pressing financial obligations. However, they don’t usually go for it for fear that their credit history may disqualify them,
Such concerns are valid. The vast majority of lenders usually overlook customers with a poor credit history and consider them untrustworthy with repayment. But with payday loans, the situation is very different. Payday loans are a viable financing option for you if you run on a poor credit score or you’re hoping to avoid strenuous credit checks.
Let’s dive into what payday loans are and discover if it’s possible to get this type of funding with a bad credit. You’ll also get insights into the recommended places to get loans, including WeLoans, a reliable broker with large industry connections to top-rated lenders. You can find payday loans for bad credit at WeLoans for your financial demands.
What Are Payday Loans?
A payday loan is any type of funding that requires you to make payments when you receive your next paycheck. The origins of payday loans date back to as early as the 1930s when lenders would offer employees an advance. In turn, the workers will renegotiate and postdate their paychecks in favor of the lender.
Payday loans are a short-term type of funding, offering between $250 to $1000 and repayable within two to four weeks. Unlike personal loans that have multiple repayment dates in the form of installments, payday funding can only be repaid once. Many payday loan offers are also notorious for their very high APRs, which make them expensive.
What Are the Chances of Getting a Payday Loan With Bad Credit?
Having bad credit does not automatically disqualify you from receiving a payday loan. That’s because payday funding is essentially a bad credit loan option. In other words, many lenders offer this form of financing majorly for bad credit borrowers.
Since the loan only needs to be paid when you receive your paycheck, lenders are more concerned about the stability of your source of income. So, they may occasionally overlook your poor borrowing history if you can prove a regular inflow of cash.
Interestingly, you don’t necessarily need to have a salary from an employer to qualify for a payday loan. Other sources of funds like social security benefits, alimony, pensions, or other constant revenue are acceptable.
Additionally, your chances of getting a payday loan with a bad credit improve if your lender does offer no credit check funding options. Many companies in this category perform only a soft pull on your general history without worsening your score. This way, you are more assured of approval.
Recommended Places to Get Bad Credit Payday Loans
The first step to getting a payday loan with your bad credit is discovering institutions or individuals willing to lend you cash. Not to worry, there are several potential options that you can try out in search of the best payday loan offers. Below are some recommended places to get bad credit payday loans.
Your Employer
Before you take up the risk of an expensive short-term loan with incredibly high APRs, you may attempt to get an interest-free payday loan. Instead of sacrificing your next paycheck at some store or lender, you can simply ask your boss for an advance. Usually, you won’t be expected to pay fees or register, making the process very seamless.
Online Lenders
You can visit lending platforms online to get payday loans. They usually offer bad credit borrowers a chance to get funding. However, they may have harsh terms and conditions that you’ll do well to avoid.
Credit Unions
Credit unions are another viable avenue to seek out payday loans. Unfortunately, only members of a union may gain access to their loan offers. Good for you if you belong to a credit union, as you’d have a long list of alternative loans in addition to payday financing.
Brokers
Middlemen or brokers are platforms that allow you to receive different quotes from direct lenders and compare their terms. One of such companies is WeLoans. You can learn better about WeLoans and take advantage of its reputable brokerage services to compare rates and terms from multiple lenders.
Advantages and Disadvantages of Bad Credit Payday Loans
Payday loans are good, but they are not perfect. They come with several perks and downsides that you must take note of before settling for an option. It’s generally advisable to seek out alternatives before applying for payday loans. However, if it’s your last resort, here are some advantages and disadvantages to compare.
Pros
Below are some benefits of a payday loan, especially for bad credit borrowers.
- No Credit Check: You can scale through the tedious approval process with loans that do not require a hard pull on your credit. This option is perfect for bad credit borrowers who would not qualify at traditional institutions.
- Quick Access to Cash: With payday loans, you can apply swiftly and get the loan amount credited to your account as soon as two working days or less.
- Easy Mode of Application: Getting a payday loan can be fully completed online. You also do not need technical knowledge to apply and get approval. This feature is very convenient and helpful if you cannot visit a physical lender.
Cons
The demerits of taking out a bad credit payday loan is quite significant. Here are all the potential downsides you need to know about below.
- Excessive Annual Percentage Rate: Compared to regular loans, the APR of a payday loan is very high, usually ranging from 200% to 400%. This makes the entire loan too expensive and difficult to repay.
- Legal Restrictions: Many states in the US do not allow citizens to take out payday loans due to the predatory tendencies of some lenders. Also, in some locations, there is a limit on how much you can borrow, and the amount is usually small and may not be enough for your needs.
- Debt cycle: Combining a high APR as well as other attendant fees could make repayment strenuous for most borrowers. This may lead some individuals to take new loans to pay the debt they owe payday lenders. In turn, they are trapped in an unending debt cycle.
Final Thoughts on Bad Credit Payday Loan Offers
On the surface, payday loans may appear harmless, especially because they are short-term sources of financing. However, they are very expensive and may have undesired incomes. For bad credit borrowers, it may be the only option if you’re cut off from other types of loans. But even then, it is important to be careful when opting for a loan offer.
