Having a low credit score isn’t an automatic sentence to a life without loan options. Bad credit loans direct lender allow people with poor credit to access funds for a short term. If you need money for an emergency, consider a payday or cash loan. A high interest rate is better than delaying a tooth filling, starving for a week or making your kid skip the big game. However, you need to be careful and endeavor to pay off the debt within the original time frame. The more you renew a payday or cash advance loan, the more overwhelming the debt becomes.
Direct lenders do not care if you have bad credit. The main concern of a direct lender is your ability to repay the loan. For customers with jobs or access to collateral, a short-term loan with bad credit is relatively easy to obtain. Without a proven ability to repay or an alternative type of asset, a co-signer may help you secure a bad credit loans direct lender. If your spouse or partner has a job, ask them to cosign the temporary loan.
To obtain bad credit loans direct lender varieties, you need proof of income. This proof can be a recent pay stub or bank statements showing regular income. A direct lender reviews this information to determine how much you can borrow. Proof of address and other identifying details are required. It can be your driver’s license number and social security number.
While a payday lender may not run your SSN for a credit check, it is needed to track the new debt. If you do not repay the loan, the SSN is really important for the lenders. It provides them with the ability to leave negative feedback on your credit report.
When you do not have a payroll job but receive other income, prepare to substantiate a dollar amount. Provide proof of regular alimony payments, present a Social Security benefit statement or offer a bank statement showing funds provided through a trust or annuity to the bad credit loans direct lender.
The lender takes these materials and uses them to determine the loan amount you are able to repay. Sometimes the amount may be greater than the funds you requested. Do not take excess cash to avoid facing additional interest charges. If you can’t repay at your next payday taking excess cash can become a problem. Even if it is available. Only borrow as much as you need to deal with your emergency and get by until your next paycheck.
Certain bad credit loans direct lender may also provide loans when you have limited regular access to funds but possess collateral. If you own property, such as land or car, bring your land deed or title with you. You will have the possibility to offer them as back up.
A car-based loan will be easiest to secure. Indeed, value is then more easily substantiated through the Kelley Blue Book or other means. Unless your land was recently appraised, the lender will not know what is a fair price or loan amount.
When you offer an item as collateral, you must realize you risk losing the property. If you default on your loan, the bad credit loans direct lender can seize your car or obtain a lien on your property. If you sell the property, the lender gets dibs on the proceeds and may charge accrued interest. Over time, one payday loan for less than $1,000 could take several thousand off of a home sale.
Most short-term loans require repayment within one paycheck cycle. For example, a payday loan is tied to your next paycheck. When you get paid, the loan comes due for the full amount borrowed. The bad credit loans direct lender also typically charges a service fee and possible interest.
Many lenders offer to extend the loans to another paycheck. However, they charge an additional service fee each time the loan is passed forward. Interest also starts to accrue on the unpaid balance and any service fees folded into the balance.
Failure to pay a cash advance loan back immediately can leave you facing exorbitant overall interest rates and in a deep financial hole.
Payday loans and car loans work much the same way but often feature additional terms spelled out from the beginning. For example, a car loan repayment schedule would have multiple repayments spaced out over a short-time period before the loan is reprocessed. A large payday loan may also provide for repayment over a few upcoming paychecks before you need to obtain a new loan.
Obtaining a cash loan with bad credit isn’t impossible, but it’s important to assess your options. A loan with a seemingly straight forward service fee quickly becomes overwhelming when not paid off immediately.
Direct lenders earn the most money from perpetual borrowers who spend years repaying a single loan. This happens as you renew the loan each paycheck for repayment when you get paid next time. The addition of a new service fee each time and accrued interest quickly turn a $500 loan into a $1,500 bill. You can easily end up paying for an emergency car repair long after the car has died.
When you take a cash loan in an emergency and can’t repay it immediately, start searching for ways to pay it off with another loan or credit offering. Even if it takes time, move the loan to a new lender as soon as possible to save on interest and service fees.
Look for credit cards designed for low credit users to assign a flat interest rate to the debt as you work to pay it off. This method also helps build your credit. With enough hard work to pay down the bill, you may qualify for a better loan for a future emergency.
Ask a family member to help you pay off the loan when you can establish a repayment plan. Find personal items to sell to cover the expense. If you have an income problem, look for new opportunities to improve your skills and earn more money to avoid ending up in a repeat lending and repayment trap.
While payday loans and cash advances can end up as nightmares for some borrowers, they are a valuable service when used properly. A direct lender loan provides you with the money you need in a jam even when you have bad credit. The important thing is to use the experience as a learning tool. Work to obtain the better credit you need for better loans and save up for future emergencies.
About the Author: Ashley M