$500 Personal Loan With Bad Credit
Do you need a quick $500 loan today but are afraid if your bad credit will prevent you from getting approved? It's a known fact that people with low credit scores will find it almost impossible to apply successfully for a personal loan from banks and financial institutions but it doesn't mean that you will not be able to get a loan elsewhere. As a matter of fact, there are numerous non-bank loan lenders you can turn to for your credit needs and in this article, we take a look at these loan providers that give small consumer loans for people with bad credit, how they work and whether it is feasible for you to use them.
For those with bad credit, categorize as having a credit score below 550, you are considered as high risk to mainstream lenders and this group of people will find it extremely tough to get credit from banks and high-street financial institutions. Post subprime crisis, banks are tightening their lending criteria and even if you have a fair credit score between the 580-620 range, you are also considered to pose moderate risk.
Therefore, for people with bad credit, many of them are turning to finance companies that provide short term loans with no credit check. These non-bank lenders advertise themselves as being able to offer you a cash loan even if you have very bad credit and despite the high costs associated with such lending, they are very popular with consumers.
How It Works
Some of these no credit check lenders operate as payday loan companies, where the term 'payday loan' is becoming a catch-all phrase encompassing these short term loans that are accessible to people with bad credit. A short term payday loan, is basically a cash advance against your future earnings and most payday loans are available in relatively small amount with a quick repayment period of 14 days, up to a month. As an example, if I need to borrow 500 dollars with no credit check, I can apply for a 30 day payday loan and if approved, the money will be transferred to my bank account and I will only pay back when I get my next salary.
Collateral is not required for borrowing money with payday loans but because they are income-based lending, applicants need to provide verifiable income, proving their current employment and salary earnings. Common lending criteria from payday loan companies include a minimum monthly salary of $800, in full-time employment at your workplace for at least 3 months and you have no outstanding debts from other cash advance lenders.
From my observations, most payday loan lenders also preferred that your salary is paid through direct deposit to your bank account. This is to ensure that they can debit the money directly from your bank account when your payment date is due.
Going into their rates, payday loans are generally high-cost, and the interest rate is significantly higher than what your bank quotes you. It is not uncommon to pay $25 for every $100 you borrowed although most are in the $12-20 range for a 30 day loan. While critics are quick to paint them as modern-day loan sharks, a sense of perspective is appreciated given the fact that payday lenders are providing credit to high risk borrowers without the presence of collateral.
With a payday loan that you can apply with no credit check, it is possible for anyone to borrow money with bad credit. If you need to borrow 500 dollars today, why not find an online payday lender to enquire more?
