Payday Loans

Do Not Take A Bad Credit Cash Advance If You Are Trying To Repair Your Credit

If you have past due bills and are even struggling with making ends meet, borrowing a bad credit cash advance will only worsen your condition. Though you may get some temporary relief, as these short-term loans provide you instant money, but they also require you to pay back within a very short frame of time, which may not be an easy task for you considering the dilapidated financial situation. These loans thus will eventually further damage your credit situation as well. Therefore, if your FICO score is not at par and you are trying to improve your credit score by getting your finances back on track, you should never borrow bad credit payday loans. Following is a brief rundown on how these easy and quick loans work and why they do not make the right choice for you.

Why Payday Lenders Issue Loans To People With Bad Credit While Conventional Lenders Reject Loan Applications From Them?

In order to get a better picture on why bad credit cash advance does not make financial sense for you, you will first have to understand why payday lenders work differently from conventional lenders. You very well know that it is almost impossible for a person with bad credit to borrow an unsecured personal loan from a conventional loan institution. Your credit score is considered as the most important factor to determine your eligibility for all conventional loans. Even secured loans offer you a low rate on the basis of your FICO score. Bad credit people are considered as high risk applicants and that is the reason why their

applications usually get rejected. Now, you must be wondering why payday loan companies take so much risk and issue loans to consumers without even checking their credit score. The answer lies in the very fact that payday cash advances are meant to suck you financially so that lenders can make more and more money from you. No wonder why even the Federal Trade Commission has termed these loans as predatory lending programs and consumers have been warned against it.

Extremely Expensive Lending Solution With Very Small Repayment Period

For a $500 of bad credit cash advance borrowed for a period of a very small period of two weeks, you may have to repay over $800. Considering the financial nightmare that you are currently going through, it is almost impossible for you to arrange that much money within just fourteen days. And, once you miss the payment on the scheduled due date, you are into big, big trouble. The outstanding balance on your bad credit payday loan account will keep on multiplying very fast because of the extremely high APR (Annual Percentage Rate) and additional finances charges.

Borrowing Multiple Payday Loans

You might be wondering why bad credit cash advance programs are so popular over both online as well as offline market despite the fact that they are so risky and expensive. The reason behind this is that payday loan companies are advertising the ‘features’ and ‘advantages’ of payday loans so aggressively that consumers who are in urgent need of quick extra money often feel tempted to borrow it. In fact, if you look around and go through the latest reports and studies, you will be surprised to know that a large number of the payday loan borrowers have taken over a dozen payday cash advances and have no idea how they are going to repay the same. Most of these borrowers are either on the verge of bankruptcy or are considering filing for the same. What really happens is that every time people need money to pay off their existing debts or to meet other expenses, they look toward cash advance as an easy and quick solution without thinking about its harsh consequences.

Overall, if you are serious about bringing your finances back on the right track by improving your credit score, you must stay away from bad credit cash advance loans. Look out for better, cheaper, safer alternatives; there are many options available out there provided you know where to look out for.

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