Bad credit can be a real bummer, but it doesn't have to be the end of the world. There are plenty of payday loan options available for those with poor credit, and they can be a great way to get the money you need in an emergency. A payday loan (also known as a paycheck cash advance) is a type of loan that is available to those with poor credit. It is an unsecured loan, meaning that it does not require any collateral, and it is based on proof of your regular income.
The main reason for getting a payday loan is that your minimum credit score is much less important than your income. Some lenders may even skip a strict credit check, as long as you can document sufficient and reliable income to show that you will be able to repay the loan on time. If you need more than a week or two to repay the loan, consider an installment loan. This is a bad credit personal loan with a monthly payment term that lasts from three to 72 months. Typically, a personal loan charges a lower interest rate than that associated with payday loans, but is more likely to require a credit check.
A personal loan takes longer to repay, so interest may increase over time. Most reviewed lenders offer personal loans instead of, or in addition to, payday loans. MoneyMutual offers both types of short-term loans. You can start the pre-qualification process by completing a loan application form or an online questionnaire. This step does not require a strong extraction of your credit files and, therefore, will not affect your credit rating. Sharp jerks can cause your FICO score to drop five to 10 points, but damage lasts no longer than a year.
There is always a chance that a lender matching service may not be able to find a direct lender willing to offer you a loan. However, you may receive referrals to other debt service companies, such as those that offer debt consolidation or relief. The higher interest rate compensates lenders for the greater risk they take in offering you a loan. Our policy is to review only reputable credit companies that we consider legitimate, and the online loan providers evaluated above fit the bill. That's not to say that online lenders, and indeed many online businesses, have had to put up with some bad apples that hurt the reputable lender industry. If you think you have been the victim of an abusive lender, you can file a complaint with one or more state and federal agencies.
Payday Loans Charge APR and High Fees. They do nothing to solve long-term financial problems and exhaust the resources it could use to improve its economic situation. Loan renewals are common and result in expenses that rival the original amount borrowed. You should also spend time documenting your income and any other information requested by the lender. Some of this information may be confidential, you don't want it to be hacked and distributed online. Our survey of the best payday loans for bad credit shows that you have options despite a less-than-stellar credit rating.
The seven lender matching companies reviewed give you the opportunity to get money quickly when you need it. You can get small loans for bad credit from lenders like Avant, LendingPoint and Upstart. But depending on how bad your credit is, you may have to get a secured personal loan instead of an unsecured one. Among the top lenders offering secured personal loans that people with bad credit can get are Wells Fargo and TD Bank.Federal credit union rates are often lower and offer alternative payday loans aimed at borrowers with bad credit. Payday loans can be a lifesaver when you are in a difficult situation and need the money urgently.
If you are comfortable with it, ask family and friends for a loan through loan circles or a loan agreement. To complete a payday loan agreement, you will need to provide paystubs from your employer showing and demonstrating your monthly income. Your less volatile loan options are to borrow from a friend or family member and repay it without an interest rate or a small fee. The decision to approve or reject a loan application rests with the direct lender, not the loan matching service.
APRs for cash advance loans range from 200% to 1386%, and APRs for installment loans range from 6.63% to 225%. No matter what type of payday loan you choose, make sure you understand all of the terms before signing any agreement. Be sure to read all of the fine print carefully so that you know exactly what you're getting into before taking out any type of loan.
