By: Yara Zakharia, Esq.
Whether you find yourself drowning in mortgage payments or up to your neck in credit card debt, sometimes borrowing money is your only option. But what do you do if you have a bad credit history? Well, you're not out of luck, for salvation is right is around the corner, and it comes in two forms: 1) bad credit personal loans and 2) bad credit payday loans.
1) Bad credit personal loans:
Many lenders specialize in bad credit personal loans. They typically require that the client own their own home as a security or protection. The requirement of collateral is waived in the case of unsecured bad credit personal loans. Although lenders rarely extend loans that do not require a good credit history, there are some who grant them on a case-by-case basis. Before issuing bad credit personal loans, some lenders will verify a customer's credit rating with agencies, but they usually just do this for formality purposes.
Bad credit personal loans are a blessing in disguise for customers with bad credit, enabling them, among other things, to 1) consolidate their debts, 2) ensure the growth of their businesses, 3) make travel arrangements or 4) purchase a car.
Due to the higher risk potential, bad credit personal loans typically have a higher interest rate. Repayment amounts are based on the loan amount and the length of time for which the loan is required. Loans with a longer life span generally have smaller payments but higher interest rates. Because their homes serve as collateral and are therefore on the line, borrowers should make sure they can meet monthly repayments before taking out a bad credit personal loan. One benefit reaped by those holding bad credit personal loans is an improved credit history, provided that borrowers make their payments regularly and in a timely manner.
2) Bad credit payday loans:
Bad credit payday loans (also known as bad credit cash advance loans or no credit check payday loans) are small, short-term, no credit check loans that enable borrowers to get a payday cash advance until their next payday. Bad credit payday loans are a fast and reliable method of providing fast cash, usually overnight, to borrowers, who can even apply for them online. The typical gap period of bad credit payday loans is 1-2 weeks.
- They must have a stable monthly income of at least $1,000 and a checking account at the bank,
- They must be 18 years of age, and
Credit check payday loan interest rates vary from company to company. New or returning customers are sometimes offered discount rates. Payday cash advance lenders do not verify borrowers' credit reports or contact their employers, except when necessary to verify employment.
Bad credit payday loans should not be used as a regular lending source, but rather only to cope with emergency or temporary financial situations. Borrowers pay higher fees for no credit check payday loans than for traditional bank loans.
In conclusion, many companies extend bad credit personal loans and bad credit payday loans. Consumers should keep in mind that borrowing money is not a trivial matter, especially when their home is at stake. This makes weighing the decision to borrow and searching for the right loan a priority. In any case, the fact that bad credit will not prevent them from applying for bad credit personal loans or bad credit payday loans is a ray of hope for those in dire straits.