Is a Bad Credit Payday Loan Right for You?

If you have poor credit and need to get a loan, you'll often find that most banks aren't willing to help you. In the past, a person with an unsatisfactory credit rating would have had to turn to family or friends for a loan, or even visit a pawn shop. These days, there's another option, and it comes in the form of a bad credit payday loan. Payday lenders offer loans without performing a credit check, so your credit rating doesn't even come into play.

This can certainly be an attractive proposition for people with bad credit. However, it's almost too good to be true. There is a catch, and it comes in the form of high interest rates. There are times when one of these loans is a good idea, and times when they're not. Suppose you suffer an automobile breakdown, need money for an emergency travel ticket or have a bill that you must pay but cannot afford. In these cases, one of these loans can be your only option if a bank or other traditional type of lender won't loan you money. If you're seeking a payday loan for extra spending money or something that isn't an absolute necessity, then you probably shouldn't get one.

What you can expect to pay as far as rates go will vary from company to company, so be sure to comparison shop before choosing a lender. There's no real standard established, and rates can range from as little as $10 per every $100 borrowed to $100 or more per every $100 borrowed. The length of a payday loan has a lot to do with how much you'll end up paying. The longer it takes you to repay the loan, the more you can expect to be charged.

If you do end up taking out a bad credit payday loan, pay it back as fast as you can to avoid racking up big charges. The best course of action that will serve you well in the long run is to improve your credit rating. Paying off old debt can help. Also, there are non-profit credit counseling agencies out there that can not only help you repay your debts, but improve your credit rating and teach you how to establish and keep good credit. That way, next time you need a loan you can get one at a low interest rate rather than paying the expensive fees charged by payday lenders.

Copyright 2006 Jim Sterling - All Rights Reserved

 

 

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