Payday Lenders for Bad Credit
$100 to $5,000 paid out by 02:44am
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During tough economic times, people rely on assistance in a number of ways. Counting on help from family members is a staple of navigating difficult periods, as parents, siblings, and others can provide help with everything from room and board to extra cash. Friends are another lifeline for those struggling, both in terms of financial/material assistance and emotional support.
Yet not everybody finds themselves in situations where others are able to assist with various financial needs. In these cases, individuals and families alike have to find help through more formal sources. Whenever a bit of extra money is needed, borrowing from reputable lenders is often the best course of action.
For those not able to secure lines of credit or loans from traditional lenders, payday lenders offer a flexible array of services. With tens of millions of loans given nationally every year, the use of such loans is both common and safe. Let’s examine why you shouldn’t be hesitant to use short-term lenders if you’re currently struggling to make ends meet.
Perhaps one of the biggest reasons why borrowers shouldn’t fear the nothing of short-term lenders is the sheer number of people who use these services safely each year. The volume of both borrowers and amount borrowed is substantial – larger than many key industries – and the vast majority are paid back with no issue.
Exactly who uses short term loans direct? Take a look at the following data:
Some people are skeptical of payday lenders due to their broader business model. However, these critics overlook the immense role that these companies play in guaranteed access to loans in many communities.
The Federal Reserve notes that the number of banks in the United States has dropped by roughly half over the past 20 years, with small-scale banks being the biggest victim:
“The number of banks in the United States fell by almost half over the past 20 years – from about 10,700 in 1997 to about 5,600 in 2017. About 97 percent of the decrease was accounted for by community banks.”
These community banks historically have served poorer and more isolated communities where larger financial institutions simply deem the median borrower too risky. As the number of large banks continues to increase at the same time, many communities are finding themselves without access to small-scale lending options. Stricter and more nationalized lending policies by these banks can mean that many have no traditional lending options available in their communities.
This is where the role of payday lenders for bad credit and no credit borrowers becomes so valuable. In communities without traditional lending opportunities, quick loans for bad credit provide a valuable financial tool. By being able to borrow small sums of money over short periods of time, these community members can make ends meets without having to face constant rejection from established banks and lenders.
Pew also found that an overwhelming majority of those who use payday lending services would be forced to cut back on food and medical expenses or delay paying bills without the service being available.
As such, payday lenders provide valuable assistance to communities that would otherwise be neglected or forced to swallow more painful financial decisions.
For those who are both working and struggling with financial matters, it often only takes a bit of short-term help to alleviate the problem. Millions of families find themselves persistently paying bills late or avoiding needed expenses simply because they cannot secure an extra few hundred dollars in one lump sum. This is another reason why people should not be afraid of payday lenders: they provide limited, short-term assistance where it counts.
The Consumer Financial Protection Bureau found in 2013 that the average length of time it takes for a consumer to repay a payday loan is around 18 days. Given that the average length of time in repaying an individual loan is only a couple of weeks, the idea that borrowers are being trapped under the weight of short-term loans is entirely inaccurate.
By being able to borrow a few hundred dollars that will be paid back in a few weeks, millions have the ability to take care of needed and/or unexpected expenses rather than delaying them. In some situations, these loans can even save borrowers money:
With these concerns in mind, it is easy to see why short-term lenders are a responsible option for many who are struggling financially. By offering small and short-term loan repayment plans, some consumers can even save money by borrowing from them (as opposed to incurring overdraft fees and late fees).
Not everybody can enjoy the benefits of traditional borrowing. As we’ve already discussed, many communities are underserved or completely devoid of banks and credit unions. For these individuals, borrowing remains necessary even if traditional lenders aren’t present.
However, even in situations where traditional lenders do exist, some people simply can’t secure loans through them. Not only are banks increasingly moving away from small-scale lending, but large numbers of people lack the prerequisite credit scores and histories to borrow from traditional lenders.
Roughly one in three Americans (30 percent) has either no credit or poor credit, making it nearly impossible for them to borrow through standard channels. Payday lenders for bad credit and no credit consumers are quite abundant, making it possible for individuals to take action when financial difficulty strikes.
What is needed to borrow from a short-term lender when you have little to no credit? A few key elements are all it takes:
Short-term loans are a commonly used tool to help those who struggle to navigate difficult financial circumstances. As long as you understand the terms and have the means to repay the loan, there are many situations in which using such loans is perfectly acceptable and responsible. Whether it be to avoid additional late fees and penalties, cover medical expenses or make needed car repairs, these lenders provide a valuable service to communities often overlooked by banks and credit unions.