An easy payday loan could provide the answer to an urgent short-term financial need. Most consumers turn to a short term loan to negotiate an emergency situation, such as performing a repair to their car. It doesn’t involve credit scoring which makes it the ideal bad credit unsecured loan. However, the absence of a credit check carries much risk for the lender and this will be reflected in the rate of interest the customer is charged. The high APR on a quick cash advance from a payday lender means that it is not a suitable source of long term borrowing.
How to Qualify for an Easy Payday Loan
As already alluded to, it is the ideal bad credit unsecured loan because it doesn’t involve credit scoring. Rather than scrutinising the borrower’s credit report for missed and late payments, payday lenders will use the following eligibility criteria instead:
- Must be a U.S. citizen.
- At least 18 years of age.
- In full-time employment with minimum income of $1,000 a month.
- Have their own checking account.
- Able to provide the lender with at least two forms of identification.
The Cost of a Quick Cash Advance
The cost of a bad credit unsecured loan from a payday lender means that it is only suitable for the short term. It will typically cost $20 to $25 to borrow $100 for a single calendar month. To put this into perspective, the rate of APR is normally upwards of 500%. Failing to repay an easy payday loan punctually will lead to the accrual further of interest and charges. This must be avoided as debt will quickly spiral out of control.
How Bad Credit Unsecured Loan from a Payday Lender Work
Provided that the eligibility criteria have been complied with, the customer is guaranteed to be approved for a short term loan. The borrower provides the lender with a postdated check that covers both the principal and any interest that will accrue. The check must be set to clear on the date that the customer is paid. Provided that all the easy payday loan paperwork is completed prior to 2.30 PM, the money will be in the borrower’s bank account the same day. In any event, it will be there within less than 24 hours.
Pros and Cons of Easy Payday Loans
A bad credit unsecured loan or quick cash advance can help a consumer out of a short term financial hole. Payday lenders offer finance to those who have been forgotten by the banks. However, the cost of borrowing money is extremely high and this will leave less money to pay the bills in future months.