The stigma of a bad credit score is hard to avoid. If you are looking for a personal loan with bad credit, generally the only option available to you is what are called cash advance or payday loans. Once upon a time, using these services was considered even more terrible than having bad credit in the first place. However, since the federal government decided to take over the regulation of payday loan facilities, much of the bad associations that people have with these personal loans has gone away.
There Are Some Differences
Clearly, if you qualify for a traditional personal loan from your local or community bank that is the best option for you in times of need. Generally, brick and mortar banks offer the lowest interest rates to those who qualify for their loans. The problem with this scheme, however, is most people, and especially people with bad credit, do not qualify.
Cash advance loans, on the other hand, are given out without regards to credit score. Instead, they are income-based and carry a higher interest rate. However, the regulation of cash advance loans by the government has made the interest rates on them far more reasonable than before.
Meet the Qualifications
The reason that many people with poor credit scores use payday loans is simple: there is no credit check. This makes obtaining the loan that much easier. However, there are some minimal qualifications that you will need to meet in order to get this type of loan.
First, you must be at least 18 years old.
Second, you need to have a reliable job that bears a steady income. You also need to have been working at that job for six months or more.
Finally, you need to have an active checking account with a current balance equivalent to the amount you wish to take out with your payday loan.
Cash Advance Details
Since most of the people who use cash advance loans have questionable credit histories, the details that are attached to taking these loans are somewhat different than many of the loans you are used to. Generally, payday loans are only given in small amounts. Because they are personal loans, they do not require collateral. However, the fees and interest attached to them are far higher than the rates you see advertised by local banks. If you do not believe you will be able to repay the personal loan you take out, then you need to stop right now. The fees associated with late and missed payments on payday loans add up fast and can be equal to the amount of the loan itself if you are not careful.
Find a Payday Loan
Online lenders often specialize in payday loans. There are many lenders who you can contact and a simple web search will lead you to them. It is of the utmost importance that you be sure to get several quotes before signing any deals, however. Because of the high interest and steep fees of cash advance personal loans, you need to compare the offers you get to make sure you are not being swindled.
Also, make sure to perform a background check through the Better Business Bureau on any lender you want to make a deal with online. This agency will assure you that the business you choose for your payday loan is reputable and reliable.
By following this advice, getting a personal loan with bad credit will be simple and fast.