When one finds themselves in a financial rut and cannot get a $5,700 short-term loan due to bad credit history, a payday lender might come to the rescue.
What Is a Guaranteed Payday Loan
In contrast to the traditional bank or credit union, lenders with “guaranteed” payday loans have more flexible criteria. It doesn’t mean they accept anyone, but for such providers, your credit history is less important than your current ability to pay, which is determined by your source of income, for example. If you have a bad credit history, check out Bad Credit Loans in New Mexico to get more info.
Getting Started with a Guaranteed Payday Loan
First, you have to apply – either online or in a physical store. The lender will study your documents and make a decision whether or not you’re approved.
If your application has been successful, after approval you can pick up the loan either in-store (usually as cash, check or prepaid debit card) or have the funds transferred to your bank account.
Then, you’ll have to pay off the loan on the particular due date, usually your next payday. Therefore, you should plan ahead and know for sure how will you handle the repayments – high interest and all.
What to Know Before Taking Out a Short-term Loan
The loans of such kind as payday, installment, auto title, etc., have very high APRs and fees. This leads many borrowers into the cycle of debt, where they have to take out more loans to pay back the previous ones. Therefore, before signing up for anything, you should consider what other options you have to better your financial situation. They could be:
- Charities, non-profit and government-funded organizations that can help you with the basic expenses, like food, shelter, medical emergencies, etc.
- Try to extend your payments. Talk to your landlord or your creditor and negotiate other, better terms, so you can have time to get your finances together and pay off your bills or debts in full.
- Consider taking on another job, getting a side gig, or signing up for an additional shift at your main place of work.
How to Get the Best Offer
To compare lenders effectively and find the most suitable terms for yourself keep in mind the following features:
- The amount you need. Different providers have different minimum and maximum sums that they can lend.
- The ideal terms. These are governed by states, but also they depend on the type of loan you’re getting.
- How quickly do you need the money? Not all lenders will give you cash the same day as you apply, for some, it might take a couple of business days to process your application.
- What credit history do you have? There are many lenders that accept an applicant with bad credit history if they have a stable income and meet other criteria, for example, a company that provides Bad Credit Loans in New York.
- If you like to speak to a provider in person, but want to get your money from a big chain company, consider the store network.
What Advantages and Disadvantaged Do Payday Loans Have
It’s important to go into money borrowing with a clear head and a full understanding of the process to avoid any illusions. Payday loans are, in most part:
- Easily accessible. The application process is simple and in most cases doesn’t take much time;
- Used for any purpose. The funds are yours to put them towards any goal you want, as long as it’s legitimate.
- Protected by state law.
- Can be obtained even with bad credit history.
- Have very high fees and rates. Read the terms of a particular lender very carefully, as there could be hidden add-on fees, and make sure you understand how much you’ll eventually have to pay back.
- Can be provided by “dirty” lenders. You have to research a company you’re planning on borrowing from, to see if it’s licensed in your state, follows the regulations, and has good feedback from the previous clients. There are lots of scammers and it’s easy to fall victim to their schemes unless you have full knowledge of who you’re dealing with. If a deal seems too good to be true – it is most likely a trap.
How to Avoid Problems While Applying
The most important thing you have to do before even thinking about applying for a fast loan is budgeting. Calculate your expenses to see if you can use other sources of income, save up or else, to see what exact amount you need, and whether or not it will be worth it to have to pay it back with added fees and interest. If you’re certain that getting a fast payday loan is the right decision for you, make sure you meet the basic criteria that most lenders have:
- You’re a citizen of the USA or a permanent resident;
- You’re over 18 years old, in some states – 19 or 21;
- You’ve got a source of income.
- You have a legitimate ID (driver’s license, passport, etc.)
- You can prove your address and employment situation.
When you have all the documentation ready, and you’ve figured out who your ideal lender is – read the contract carefully. You don’t have to sign if anything seems unclear or not suitable for you. Go into the deal cool-headed, with respect for yourself and your needs.
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