If you are among those who have defaulted on their mortgage, declared bankruptcy, or missed paying bills too many times then bad credit payday loans may just be the answer to your immediate financial needs.
Normally, a bad credit standing or bad credit history can result in being disqualified from acquiring short-term or long-term loans from conventional banking facilities. This however does not mean that you should feel helpless and that there is no solution available to you; because there is – bad credit payday loans.
There are undoubtedly many reasons why people avail of bad credit payday loans. Despite the seeming popularity of this type of loan facility there are still many people who are confused. Because of the various misconceptions that surround bad credit payday loans some people who deserve to apply have doubts brought about by the different wrong information that they receive.
In order to clarify common concerns and in order to ensure that people who need immediate help can avail of the necessary funding, it is important to deal with the myths and facts surrounding bad credit payday loans.
1) Only people with bad credit are entitled to avail of the loan.
One of the most common myths associated with bad credit payday loans is that only people with bad credit can avail of them. The misconception generally arises from the actual name of the loan facility. Actually, any person who receives a regular paycheck can avail of bad credit payday loans.
This is because these types of loans do not actually do any background checks and that is why the credit background or credit history of the borrower is never brought into question. Check with payday loan providers to find out the specific requirements that they have.
2) Bad credit payday loans mean extremely high interest rates.
This was probably true when finding loan providers for people with bad credit was extremely difficult. The way things are set up now, the Internet is virtually crawling with literally thousands of payday loan providers that bad credit payday loans is not only easy to get but also faster and more convenient.
Because of the immense number of providers that are fighting for your business, borrowers with bad credit have greater chances of getting loans at reasonably lower rates. Moreover, borrowers of bad credit payday loans also have the flexibility of choosing the provider that they believe can deliver the best options for their financial condition.
3) There is no need for bad credit payday loans.
Many people believe that the only way for them to receive financial assistance is from conventional financial facilities like commercial banks. Unfortunately, if you are in a financial emergency, and need immediate access to funds, loans from commercial banks may take a while not only to be processed, approved, and the loan amount released.
This means that if you are facing a demand letter for payment of your credit card bill for example, obviously commercial bank loans are not the wisest choice. With bad credit payday loans you can get immediate access to the funds that you need in as short as one hour with the actual amount being electronically transferred to your savings or checking account in as fast as 5 minutes.
4) Payday loans can only be used for emergencies.
Another misconception that normally surrounds bad credit payday loans is that they are only used for emergency expenses like mortgage payments, credit card bills, medical expenses, and other financial obligations that need your immediate attention. This is actually very far from the truth.
This is because bad credit payday loans can be used for virtually any type of financial obligation including consolidation of your debts. Moreover, providers of payday loans do not even ask you for the reason why you are availing of their loan facility. Therefore it is not true that bad credit payday loans can only be used during emergencies.
5) Anyone who applies for payday loans is approved.
Because of the simplicity and convenience offered by payday loans including the minimal requirements for application, many people wrongfully assume that anyone who applies will be approved. If this is the case then there is no need to verify if you are eligible. Furthermore, just because no credit background check is being done by the payday loan provider does not mean that anyone who applies will be approved.
Essentially, when it comes to bad credit payday loans unless you can provide proof that you receive a regular paycheck there is a great chance that your loan application will be denied. You also have to understand that even if you can show proof of gainful income you are not assured of approval.
6) Not paying your payday loans on time means higher interest.
This myth emphasizes the importance of reading and understanding the terms and conditions included in the loan offer. Basically payday loans are considered as short-term and are generally due on your next pay date. However, this does not necessarily mean that if for some reason you will not be able to meet this deadline that you are already out of option and simply pay higher interest.
Some providers of bad credit payday loans actually allow borrowers to recycle their loans before they become due. This does not mean that you will be subjected to higher interest rates but more of having to pay an additional fee for the renewal of the loan. The renewal may carry the same interest rate as the original loan.
Hopefully by clarifying some of the most common misconceptions that surround this type of loan facility will make it more functional to people who really need it. Just keep in mind that short-term solution like bad credit payday loans should not be used as a regular escape for financial obligations.
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