Are Payday Loans the Only Option with Bad Credit?
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Borrowing with bad credit is hard, but don’t let your subprime score convince you payday loans are the only options out there. Find out what you can use as an alternative to these high-cost, high-risk loans.
Why Does Credit Matter?
Credit is one of the biggest factors standing in the way of getting a loan. Plenty of financial institutions require their borrowers to have a fair score at the very least. This score suggests you’re responsible with borrowed money, and you’ll pay them back on time without question.
Bad credit — which can happen after forgetting to pay just a handful of bills— casts doubt on your ability to repay what you borrow.
With these insights, some financial institutions may shy away from subprime borrowers. These lenders might still deny you even if you request a small amount of money to help cover a minor car repair or medical expense.
Some Payday Lenders Have a Reputation
When you’re locked out of the usual personal loans, it’s easy to think of payday loans as your only other option. These small-dollar, short-term loans are convenient and simple to get, even when your score has dipped far below subprime.
In fact, you can even find a payday loans online no credit check direct lender that’s willing to ignore your score altogether.
While this might seem like a swell idea at first, it points to some problems later on. These kinds of online direct lenders tend to charge incredibly high interest rates from the get-go, and they expect you to pay them back in one lump sum after just two weeks.
All these signs point to how a payday loans online no credit check direct lender isn’t concerned about your ability to repay their loan. Many of these lenders are hoping you can’t afford it, so they can charge you extra fees and earn more money.
Installment Loans for Bad Credit Might Be an Alternative
If you need a payday loan, chances are money is tight. You may not be able to handle the quick turnaround that comes with these online loans.
Luckily, not all short-term loans are that short. You can find installment loans for bad credit as a possible alternative to payday cash advances. While paying higher interest than prime borrowers is inevitable with a low score, installment loans provide a more spaced-out repayment style to take the pressure off your finances.
How much they cost varies from lender to lender, so it’s a good idea to research what you need to try to get an online installment loan and what these online loans cost.
As online loans with monthly payments, they break down your debt into several smaller bills, so you don’t have to pay everything back in one lump sum if you don’t want to. This means your payments will take up less of your monthly take-home pay, giving you more room to breathe.
Bad credit can cast a long, dark shadow on your borrowing history that can trick you into thinking a payday loans online no credit check direct lender is your only option, but there are alternatives.
No borrowing option is ever perfect. It’s up to you to compare payday loans and online loans with monthly payments to find the best possible fit for right now. And later, you can look into raising your score for next time.