Payday loan lenders allow individuals to borrow money with bad credit when other lenders simply wouldn’t be interested. Very bad credit loans are regularly offered to customers with missed and late payments because there is no credit scoring during the application process. An instant cash advance may be available in as little as 15 to 20 minutes.
Who Can Payday Loan Lenders Help?
Although a same day payday loan isn’t a source of long-term borrowing due to the rate of interest, it can be of genuine help in the event of a financial emergency, such as paying the rent, mortgage or a utility bill. It is necessary to settle the principal (the amount borrowed) and any accrued interest 30 days later in order to prevent the accrual of further interest and charges.
Qualifying Criteria for Same Day Payday Loans
- The applicant must be a minimum of 18 years of age.
- Must be a citizen of the country where the adverse credit loan is being made.
- Access to 2 forms of ID – 1 must be photo identification.
- The borrower must have a full-time job.
- A valid bank/checking account.
The Borrowing Terms Offered By Payday Loan Lenders
As already discussed, very bad credit loans are not a means of borrowing money for the long term. Although rates vary considerably between providers, it typically costs $20 to $25 per month to borrow $100. The term of an adverse credit loan is just one calendar month. The borrower will normally leave a post-dated check that is set to clear when the borrower is paid.
The Dangers of Very Bad Credit Loans
The usury rate of interest on a same day payday loan is indicative of the risk of default that payday loan lenders face. However, it is important to appreciate that borrowing $1,000 will accrue at least $200 of interest. This means that there will be less money to pay the bills the month after. In order to avoid a dependency cycle, it is necessary to address this imbalance through a bonus or working over-time.
Benefits of Adverse Credit Loans
Although criticised in certain circles, payday loan lenders offer consumers access to credit when traditional lenders are not prepared to offer assistance. Should an individual not currently be in full-time employment, it may be possible to get a pawn shop loan on similar terms. However, it will be necessary to provide collateral in order to provide the lender with security due to the risk of the borrower defaulting on the agreement.