We constantly hear on the news about the poor economy and the slow job market which has left many people in tough financial situations. If you happen to be one of the millions that have suffered financially and have ended up with poor credit then you are familiar with how difficult it is to find financing when you need it. This is perhaps the main reason why bad credit loans such as payday or cash advance loans have become so popular.
It is well known that cash advance loans or payday loans have much higher interest rate than other conventional loans. In fact, many would wisely advice that you should stay away from these high interest loans. The question is why are these loans so popular when they have such high interest rate and whether such loans are ever right for you.
Why bad credit Loans are popular
These are typically loans for people with bad credit. These loans have become popular because it is very easy to qualify for them and the funds can be made available very quickly. You can receive the funds in your account from a bad credit loan lender in as little as one hour to 24 hours by filling out a simple application even if you have poor or no credit. This hassle free, quick and easy access to cash has made payday and cash advance loans very popular.
The important point is to be aware of is that just because obtaining a cash advance loan is easy, it does not mean that you should rush to apply for one. These loans as previously mentioned carry very high interest rate and should be repaid within the agreed upon period, which is usually two weeks.
Are payday loans right for me?
The answer to this question really depends on your situation. Sometimes it is the availability of funds that is more important than the interest rate charged for these loans. For instance, if you are short on cash and need to pay urgent medical bills, your only option maybe to apply for one of these loans, if you were not able to borrow from family or friends.
Do not take out a payday loan if you have not explored all your options. You should always try to find other sources such as family, friends and other lending firms. Only if you have exhausted all options and need money urgently, you should apply for these bad credit loans. Do not take out these loans to pay minor bills or to acquire things you do not urgently need.
Cash advance loans can be used to pay for car repair or pay bills for utilities that are at risk of being disconnected, since it may cost more to have it reconnected. Before you take out a payday loan, be sure that you have the means of pay the loan back on time. If you are unable to pay these loans on time, you will have to roll them over which will cost considerably more.
Many individuals have gone through terrible debt due to taking out payday loans which they were unable to pay back on time. There is a serious chance that you could get yourself in debt if you do not use these loans responsibly or if you take out these loans for the wrong reason and without planning. If used responsibly then you are able to use these bad credit loans to resolve your emergency and repay the loan back when your next pay cycle arrives.