Home & Family Facts and Notes

Bad credit loans are loans that can be acquired by a person who has bad or poor credit. It is actually possible for a person with bad credit to get a normal loan but the interest rate would be much higher for them than compared to that of a person with good credit. The most common type of bad credit loans are known as payday loans

A payday loan is also known as a payday advance or a paycheck advance. A payday loan covers a borrower’s expenses until their next payday. Generally you can borrow $100 to $500 with a payday loan and you must pay it back within two weeks or when you are paid next. Interest rates on payday loans tend to be higher than most other loans and they can go up to 400% APR. They two main ways to obtain payday loans are through retail lending and internet lending.

Retail Lending

A borrower goes to a payday lending store to secure a small loan through retail lending. The borrower must pay back the loan on their next pay day. Finance charges ranging from $15 to $30 per $100 borrowed normally come with payday loans. Due to this the rates can range from 390% APR to 780% APR. In retail lending the borrower writes a check in the full amount of the loan plus fees to the lender. The borrower will generally pay the loan back in person when it is due. If the borrower chooses not to pay back the loan in person then the lender will simply process the check through the borrower’s checking account.

If the borrower cannot cover the check due to a lack of funds then the borrower will have a bounced check fee from their bank. There can also be additional fees and an increased interest rate due to their failure to pay. If the borrower cannot pay then members of the national trade association will offer an extended payment plan for no additional cost.

Internet Lending

With internet lending you fill out an online application or you can fax a complete application that requests personal information, employer information, social security number, and bank account numbers. A copy of a check, recent bank statement, and signed paper work is then faxed by the borrower. The online lender will directly deposit the loan in the consumer’s checking account and electronically withdraw the payment and charges on the borrower’s next payday. The best way to find internet payday loans is through, paid ads, referrals, e-mails, and by searching online.

A bad credit loan is a loan that someone with bad credit can get. Normally a person with bad credit can get a normal loan but their interest rates will be higher. The most common bad credit loans are payday loans. Payday loans generally come with high APR and interest rates. There are two options when getting a payday loan. You can choose to get it through a retailer or through the internet. Failure to pay back the loan will result in extra fees from the lender and your bank. An extended payment plan will be offered to a borrower if they fail to make a payment, at no additional cost to the borrower.

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