Where to find a cheap bad credit loan:

There are many venues for obtaining bad credit loans or payday loans as they are also known as. Credit Unions, banks, pawn brokers and money lenders are but a few. Many can be found online where the process is made extremely simple and very quick. The key is to do your homework and find the best loan at the best interest rate that suits your circumstance.

Avenues for a Bad Credit Loan:

Have a look around and weigh up the pros and cons. Some venues will be difficult to deal with and some will be easy. Some will be fairly cheap and some expensive however, this form of unsecured loan is high risk to the lender. Therefore a higher interest rate is unavoidable.

Credit unions:

There are some credit unions who provide unsecured payday type loans. They will be hard to find and their regulations will be more strict than most lenders. While their interest rates, in general, will be lower than banks, they will still be much dearer than lenders who deal solely in payday loans.

Banks:

As with credit unions, it is possible to find bad credit loans with banks but they will also have strict guidelines. As the both are lending investors money and not their own they need to have a strict protection regime around their lending rules.

Pawnbrokers:

If a payday loan is the way you decide to go, then pawnbrokers are a good option. They can offer a number of choices for a short term bad credit loan at reasonable rates. Apart from a standard short term loan against your next payday, they also offer loans against personal items of value such as jewelery. A determination on it’s value is made and a loan is made based on that figure. The lender will hold the item until the borrower can buy it back at the cost of the loan plus  a predetermined fee.

Online Agencies:

Short term, unsecured bad credit loans are available through many, many online agents. The application procedure is simple with a minimum of requirements that usually only consists of proof of employment. The application is processed in a matter of hours and often funds will be deposited into your bank account on the same day.

Advantages of Bad Credit Loans :

The advantages of bad credit loans certainly has it’s advantages provided the borrower uses them as intended. That is, a short term loan to get you over a tight financial spot. They are definitely not an answer to a long term need. The loans are quick and easy to obtain with no credit checks involved. The borrower is forced to make the repayment on time as bank details need to be provided during the application process. Borrowers can’t simply skip making a payment. The lender has first bite of the cherry on pay day. It is almost impossible to get into financial difficulties with this form of loan provided the borrower is disciplined and does not begin to roll over the loan.

Disadvantages of Bad Credit Loans:

Interest on loans secured against property is normally tax deductible. Such is not the case with unsecured loans.

While interest rates on secured loans can be as low as 5% calculated on the Annual Percentage Rate (APR) and on credit cards from around 15%, the APR on a payday loan at 15% will produce an APR of 380%. This is not a problem if the loan is paid of on time and it will get a borrower through a trying couple of weeks. If, however, the loan is rolled over the interest will quickly become unmanageable until after 12 months they will find themselves in an impossible financial situation with a ridiculous interest rate. At times, situations provide no alternative but to apply for a payday loan, therefore a great degree of thought and common sense will need to be employed.

There is no give and take with a bad credit loan. The repayment will be taken straight from the pay before a borrower can access it. A payment can not simply be skipped and caught up with next month as is the case with credit cards. The loan can be refinanced but it should be remembered that the Annual Percentage Rate will jackpot quite quickly. There will be an total obligation every payday to meet the repayment. The borrower should be sure that their salary is such that it will accommodate these repayments, if not, it should be avoided at all costs otherwise desperate financial shortfalls will occur..

Before applying for any loan the borrower should be fully conversant with all the terms and regulations pertaining to individual companies. Talk to people that you know have accessed these forms of loan and learn about their experiences. In doing so you will learn what pitfalls have been discovered by others. You can learn by their mistakes and avoid making the same ones yourself. Be sure that you are seeking this money for the right reasons. They are specifically a short term answer to a short term money shortfall and should never be used for any other reason.

For Americans in particular, payday loans ratified by banks and other lenders provide low interest solutions for a  persons short term financial situation. Whether it be an unexpected medical emergency or unforeseen motor vehicle repair, they are an excellent way out provided the borrower is diligent and astute about it’s use.