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online payday loans for bad credit
What is Payday loans?
A term Payday loan is used as they are meant to payback on your next pay check hence your pay day. This loan is specially designed for people with less than perfect credit score, and required cash in emergency situations such as broken car repair or seeking emergency medical care.
If you are aware of what payday loan is you might have heard a misconception and rumors around you by your friends and family that payday loans are dangerous and you should not obtain one, seriously speaking none of them have faced what you are facing. Getting Finance from traditional places when you have poor credit score is hell lot of work and ends up in rejection, frustration and cost you falling your credit score even further making your financial situation even worse.
So lets just open up about why every one thinks payday loan is not suitable or they say not safe and it is dangerous option one should avoid. the obvious answer of this is high APR!, right? Of course, but how much? sometimes approx 400% of amount lend. Agree this is high! but do you know that APR (as name suggest Annual Percentage Rate) is calculated over the year of time in general and how much time payday loan meant be be paid in real world? Yes Right, Your next payday, which is supposed to be in next week or two ie. max 14 days so interest rate for this 14 days is not that much scary every one is talking about.
Here is representative example and reverse calculation of how should APR is determined
Example of a payday loan
Ms. Portman takes out a two-week payday loan in the amount of $400 to help pay for a car repair. The lender charges a $60 fee. What is the APR?
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Step 1: Add all fees and interest charges to calculate total fees.
Total fees (given) = $60
Step 2: Divide the total fees by the amount financed (borrowed).
$60 / $400 = 0.15
Step 3: Multiply the answer by the number of days in a year: 365.
0.15 x 365 = 54.75
Step 4: Divide the answer by the term of the loan in days.
54.75 / 14 days = 3.91
Step 5: Move the decimal point two places to the right and add a percent sign.
Answer: 391% APR on this loan
So on her next Payday Ms. Portman paid in full $460 and she is done with her crises and even closed her payday loan account which likely increase her credit score as she paid that cash in time, most payday lenders report your on time payment to credit bureaus.
Now you may understand that this isn’t so burden some amount in emergency cash crises to solve. people scare of these high APR just for nothing.
Some people call payday loan as predatory in nature as they use it as their first option as their every cash needs and use it as long term finance solution. this results in financial burden to them and they broke eventually for using wrong kind of financial solution for wrong kind of situation.
Advantages of Online Payday Loans For Bad Credit
- They are fast – fill in your application in 5 minutes
- No Hard credit check – Soft credit checks are better from a credit score perspective . Lenders use your income and address among a few other things to determine if you can get a loan
- Done online – You do not need to go to a storefront lender
- Better approval chances– You will know within a day if you are approved or not.
- Cash the next day – You can even get cash the same day if you apply before 11 A.M in some cases.
- No harm in trying– With a 5 minute application process it will not waste of your much time.
