You often hear horrible things about payday loans and the establishments that provide them. They are rip offs, they screw people over, they try to trick you into extra fees, they get people caught up in an endless debt cycle, they are designed to keep poor people poor, etc. All these things are said about instant loans, but, when it comes down to it, there are some benefits involved as well.
If you are in a financial bind and in need of a loan, whom can you turn to? Some people have good credit and can turn to their financial institution for a traditional loan or a line of credit, while others might turn to friends and family.
But what happens if you do not have these options available to you and you need cash fast? Finding a lender that provides bad credit payday loans might be your only solution.
Unfortunately this is the case for many people who are down on their luck and in need of financial rescue. If this is your current situation, it is important to understand that there are some benefits involved with seeking bad credit payday loans, as long as you only seek this option in emergency cases. Using payday advances for any other reason can be risky and can lead to problems.
Payday loans are a quick and easy way to get cash when you find yourself in the middle of a financial bind. They are short term and generally issued in small amounts, based on your income.
They were originally created to assist people with fast cash to make it to the next payday. Many people use bad credit payday loans to cover unexpected expenses that occur due to car trouble, medical interventions, or unpaid bills. They are often viewed as negative, but they do bring a number of benefits.
- Bad credit – If you have bad credit or no credit history at all, it can be hard to get a traditional loan. Banks and credit unions have set standards to qualify for a loan, especially if it is not backed by collateral, such as a house or car. If you default on a no collateral loan, the bank does not have the means to get their money back like they would with a car or house. Payday lenders take the risk of lending to people who might have bad credit or no credit. Their loans do not require a credit check and cannot hurt or help your credit score unless you default.
- Qualifications - As previously stated, payday loans do not require a credit check, so qualifying is easy. Most lenders only require proof of income (either a check stubs, or bank statements) and proof of identity.
- Quick and easy - Payday lenders can provide you with cash in less than twenty-four hours. If you go to a payday lender, you can generally walk out with cash in an hour or less. This can be helpful to people who are behind on bills and need the cash instantly or need to pay for car repairs in order to get back on the road. Online lenders generally provide you with the loan in less than twenty-four hours if you have a checking account and can receive direct deposits.
- Limit – Payday loans are limited to a portion of your income. A payday lender will not lend you more than you make, which keeps many borrowers within their means. They also do not require that you specify what the loan is for, so you can use the money to help pay for anything you want.
Payday loans can be beneficial to someone in a financial bind when they are used wisely.