Payday Loans

Pay Day Loan With Bad Credit – Not A Wise Thing To Do

If your credit is not at par and you need to borrow a loan urgently, a pay day loan with bad credit may look the best option for you. It is easy and fast. You do not even have to find specific payday lenders that offer this type of loan. As a matter of fact, none of the payday advance companies checks your credit score to determine your eligibility for the loan. Though most of them do check your Teletrack reports, but they are different from your credit reports. The information contained in a Teletrack record is unconventional and is not taken from your credit report. Despite all that, it is not at all advisable to borrow a payday loan with bad credit because this type of loan is so much costly that people with bad credit often end up getting trapped in heavy debt problems and most of them eventually go bankrupt.

Lucrative Advertisements Vs The Real Horrible Picture

Considering the extremely high interest rate that is always a 3-digit APR and can range from 390% per annum to as high as 1890% per annum, you may have to pay back over $1000 for a $500 of pay day loan with bad credit borrowed for a very small period of 3-4 weeks. If you do not pay it back in time and get a one month extension in due date, the same high rate will apply again for another thirty days and your eventual debt balance can grow as high as over $3000. As you can see, the picture is really horrible.

The reason why people still feel tempted to borrow a pay day loan with bad credit is just because such loans are advised in a way that makes these loans look like very easy and cheap. For example, a lender can advertise a pay day loan with bad credit at a low interest of $50 only. But, an interest amount of $50 does not give you a complete picture. You must try to find out whether this amount applies to

the entire amount of loan or on every $100 you borrow. In general, this amount if interest is charged on every $100 you borrow “for fourteen days”. If you are borrowing for twenty eight days, you will be liable to $100 as interest on every $100 you borrow. What is more, various processing and other fees are charged additionally. This way, a $500 of pay day loan with bad credit borrowed for 4 weeks can cost you over $1000.

As you can see, “an easy and fast pay day loan at a small interest of $50” may sound very lucrative, but when you look into the details and read the terms and conditions thoroughly mentioned in loan contract, you will be shocked to see the horrible picture. Therefore, you are strongly recommended not to make your financial decisions, especially when it comes to borrowing a pay day loan with bad credit, just on the basis of your temptation.

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