Bad Credit Payday Loans – What Is It?
Having a bad credit score is quite a headache. It is not easy to get access to credit facilities. People who have credit scores that are lower than 570 are considered to have bad credit and they struggle to get credit packages at low rates.
However, that does not mean that people who apply for loans with bad credit scores do not get loans. In fact, there are options like bad credit payday loans.
Do Bad Credit Loans Have Guaranteed Approval?
There are lenders who advertise that you will definitely get the loan even if you have bad credit. Such loans are called Guaranteed approval loans. Even though you see the phrase “guaranteed approval” on some lender’s website, does it mean you can access the loan once you apply for it?
The truth is that there is no guaranteed bad credit loan. Even if you have a good credit score, you do not have access to guaranteed loan approval.
This is because loan approvals do not depend on only your credit score. They also depend on other factors including your income. You will also be required to have a checking account. The checking account is mostly required because some lenders ask their borrowers to issue post-dated checks to secure the loan.
You will also need to be a citizen of the United States and be at least 18 years old. That means that even if the lender has a very low credit score requirement you will need to meet the other requirements before you can get the loan. This means that the lender cannot guarantee that the loan is yours even when you have not applied for it.
You should also note that the term “guaranteed approval” is often used by scam lenders. Such lenders are bound to approve your loan but the truth is that they will not offer you the cash. They will not even check your loan requirements.
That is because they do not care about you repaying the loan or not. In the end, some of them request for an upfront fee before offering the loan to you.
If you encounter something like that, it is a red flag and you must avoid it at all cost. Do not pay any money to a lender in an attempt to get a loan.
Types of Bad Credit Loans
There are several loan packages for everyone including borrowers with bad credit. There are installment loans, payday loans, and online loans.
Some of these loans are offered by direct lenders while others are offered by companies who work with several lenders. Although there are lenders who are dedicated to offering one type of loan, others offer all types and you will have the option of choosing from the numerous packages.
Choosing the Right Lender to Fund Your Loan Request
If you are going to apply for a bad credit loan online, it is important to be cautious about who you send your loan application to. The internet has several lending opportunities for lenders.
In the same way, there are several scam lenders out there. If you do not take care, you may end up getting in contact with a lender who will get cash from you but will not offer you the loan.
Here are some things to check before engaging with a lender online.
Check for reviews on legitimate websites
You can easily check for reviews from past users. Some websites are dedicated to reviewing lenders. You will find everything you need to know about the lender from such websites. Past clients will write about their rates, customer services, loan terms, and even repayment methods.
It is not difficult to find such websites. You can just google the name of the lender and add reviews and then you will see them. Talking about reviews, some lenders also feature reviews of their clients on their websites.
Although some of these reviews are true, some are just cook up stories. Avoid them altogether since it is difficult to differentiate between them.
Check for accreditation from reliable accreditation boards.
The Better Business Bureau is a reliable organization that rates companies including financial institutions. Before you engage a lender check if they have been rated by the organization. If you spot a BBB and a rating such as A+ or A-, you can go ahead and deal with them. The rating is often found at the bottom of the company’s website.
You can do what is called credit shopping to find the best rate. However, this must be done with caution. If you find lenders that pre-approved loans, you will not have a problem.
The truth is that when you apply to companies, they conduct checks on your credit report. Most often than not, it is a hard check. A hard check is when the firm pulls out all your credit information.
This affects your credit score. However, if you apply for several loans within a short period such as one month, it will all be counted as a single hard check and that will have a much lower effect on your credit score. when you apply for several loans, you can choose the best loan option.
Check for loan rates, amounts, and terms
All lenders have their own rates, terms, and the amount they are willing to offer. some lenders have lower rates but their minimum loan amount is lower than that of other lenders.
In the same way, some lenders have higher interest rates but they are willing to offer higher loan amounts. There is nothing like the best loan offer. It all depends on you and what you want. You should consider all the loan offers and choose the one that is best for you.
Speed and ease of the application process
When you are applying for credit, you should also check the ease of the application process. It will be great if you can complete the loan application process without stress.
It will be even better if you can access the loan exactly when you need it. You will definitely not want to waste a lot of time on loan applications. If you need cash urgently, it is not advisable to go for lenders who cannot promise loans quickly.