First Name:
Last Name:
e-Mail:
State:

Zip Code:

buttonbutton

payday loan facts


know your rights

Why A Loan for Bad Credit Is Preferred and Not A Payday Loan

The worldwide economic crisis has been a good opportunity for some people to learn how to source money during this period. They were able to appreciate how to compare every feature of a credit facility against other lending tools before availing its service. Interest rates are compared as well as the terms or frequency of payments. Debtors have come to their senses that lending companies are out to gain money from their predicament. And that the longer the terms of payment they were granted, the bigger the amount of interest they are paying with. This learning process is applicable in finding out why a loan for bad credit is preferred and not a payday loan instead. Is there a difference or set of disparities between the two?

But how can we make a comparison without any basis or data to start with? To begin our study, we have to search for companies that offer these credit facilities. The Internet is replete with these creditor-firms who are engaged in the extension of loans for bad credit and/or payday loans. Make a list of the websites that you plan to source information in order to form an intelligent evaluation of each loan facility. Thereafter, a tabulation is needed for every feature you wish to compare vis a vis every company that offers the same. Below is a summary of why a loan for bad credit is usually better than a payday loan.

    1. A loan for bad credit has longer terms than a payday loan. Although both are processed with the same dispatch and fastness, their terms of payments normally differ. A loan for bad credit usually comes in three months to a year in installment payments while a cash advance loan is payable at one time on the next payday or after one month. The longer and easy installment terms are convenient to the borrower as he can generate the needed funds with the ample time given to pay the installments. Unlike in a personal loan where the loan extended matures on the next payday or next month after it was released as agreed. If the cash position of the applicant is still weak, then the possibility of renewing the previous cash advance is high.
    2. A loan for bad credit accepts income sources other than employment. In case you are not underemployment, under the loan for bad credit, you are still eligible to borrow if you can prove that you have other sources of steady income. This is not so with cash advances since you have to prove that you are gainfully employed. The former caters to a wider spectrum of the market as it both serves those who have jobs and also the entrepreneurs.
    3. The maximum loan amount for bad credit is based on your earning capacity. Since the approval of your loan depends on how much is your steady income (either from employment or other sources), the amount that you will in fact receive is not therefore predictable. The amount of your loan could go higher if your income from your work is substantially high or an alternative source of income is big. However, under payday loans, the amount of your loan is normally pegged at the amount you receive on your paycheck. And you have to convince the lender that you have no outstanding debts.

 

While the list of comparison keeps on going after evaluating each feature, you are now in a position to decide which of the loan facility you will use. You will also find out that loans for bad credit are classified into two categories. One is requiring collateral while the other is not. Under the first type, the borrower is required to put up personal property as collateral to guarantee the repayment of the loan. This normally bears a lower interest rate than the loan without collateral. The lender will sell this after the debtor defaults on his installment obligation in order to recover part of the loan. The other type that requires no collateral bears a higher interest as compared to the first kind of loan for bad credit. This is due to the fact that the risk of the lender to recover his money is higher than the former.

It is widely believed that loans for bad credit that require collateral will take more time to process than the unsecured loans for bad credit. The borrower will have to submit documents to support ownership of the property offered as collateral. This would entail extra time to attend to by the lender before the approval of the loan. Unlike the loan for bad credit without security backup, the process of approval starts upon the online submission of the application form.





apply

NOTICE: PLEASE BORROW RESPONSIBLY. A SHORT TERM LOAN SHOULD BE USED FOR SHORT-TERM FINANCIAL NEEDS ONLY, NOT AS A LONG-TERM FINANCIAL SOLUTION. CUSTOMERS WITH CREDIT DIFFICULTIES SHOULD SEEK CREDIT COUNSELING OR MEET WITH A NONPROFIT FINANCIAL COUNSELING SERVICE IN THEIR COMMUNITY.


We are not a lender. Only your lender can provide you with information about your specific loan terms and APR and the implications for the non-payment of your loan. Ask your lender for their current rates and charges and their policies for non-payment. Our lenders may offer you a loan with an APR between:200% and 2281%. The APR on a small dollar, short term loan represents the amount of your loan, cost of the loan, term of the loan and repayment amounts and timing. Loans on the lower end of the APR range may be for a larger loan amount and for a longer-term. Loans on the higher end of the APR range may be for a smaller loan amount and for a shorter term. Depending on your credit needs and desire to pay your loan off quickly, your lender may only offer you loans with an APR near the high end of the range displayed.

© 2020 my24loans.com | Privacy Policy