If you need some cash to cover an unexpected expense, you may be considering an online payday loan. But even if you have bad credit, an installment loan is still a much less expensive option.
Why should you try to get an installment loan for bad credit rather than a payday loan? Here are just a few of the best reasons.
- Bad Credit Installment Loans Can Help You Build Credit
This is one of the most important reasons to choose a bad credit installment loan. Payday loans are usually not reported to the major credit bureaus – even if you pay them on time, they won’t help you repair credit.
Bad credit installment loans from a bank or online lender will always be reported to credit agencies. That means if you take out a reasonable loan and repay it on time, you may be able to build up your credit score – so you’ll pay less in interest and fees in the future!
- Payday Loans Have Much Higher Interest Rates
A payday loan should only ever be your last resort if you need an emergency loan. This is because they typically have service charges of about $30 for every $100 you borrow. That means the APR (annual percentage rate) of a payday loan can be 300% or higher.
In contrast, installment loans for bad credit have an interest rate that’s usually capped at 30% – and most people will qualify for a lower rate, or can find a lower rate by shopping around at multiple lenders.
Loan Sharks Online: How to Find an Alternative Loan With Bad Credit
Need a loan shark for a bad credit loan? Here’s how to find a fast loan
Tribal Loans: The Ultimate Guide On Lenders, Rates and Terms
Tribal Loans: Everything You Ever Wanted to Know About Native American Loans, Rates and Terms. Is a Direct Tribal Lender Right For You?
Payday Lending Under Pressure from New Bill
On May 9th, 2019, The Hill released an article that highlights a bill that was presented by Representative Alexandria Ocasio-Cortez of New York and Senator Bernie Sanders of Vermont, aiming to put a cap on interest rates for consumer loans at 15%.
Bad Credit Loans: How to Get a Loan When You Have Poor Credit
If Bad Credit is Holding You Back From Loans, Read Our Latest Guide. Compare Bad Credit Loans and Lenders at GoLoans.
- You Can Borrow More Money And Repay Over A Longer Period
With a payday loan, you typically can only borrow $200-$1,000, and you have between 2-4 weeks to repay it, depending on the date of your next payday.
This is not the case with installment loans for bad credit. You can borrow much more – depending on your income level and credit score – and get loan terms of between 12 months to 5 years. This means you can borrow more money, and repay your loan more gradually over time.
- They Have Lower Late Fees & Costs
In most cases, if you have trouble making a monthly payment on a personal loan, you can contact your lender and work out a solution, and avoid high late fees and other penalties – and unless you don’t pay for months at a time, your loan likely won’t be sent to collections.
This is not true of payday loans. Payday lenders may charge you extremely high late fees and penalties – and if you don’t pay right away, your loan will be sent to collections quickly – which means you’ll be hassled by bill collectors, and your credit score may plunge even more.
Choose A Bad Credit Installment Loan Over A Payday Loan
Even if you have bad credit, you can usually find an installment loan that will offer you better terms, a longer repayment period, and lower interest compared to a payday loan – so explore your options for bad credit installment loans now, and get the cash you need.
A South Korean Drug Maker Used to Borrow Money from Loan Sharks. He’s Now Worth $10 Billion.
Seo Jung-jin is a South Korean entrepreneur and the founder of Celltrion Inc., a South Korean drugmaker that is now working on developing a treatment for COVID-19 coronavirus
New Payday Loan Regulations Could Make Life Harder For Borrowers
The Consumer Financial Protection Bureau (CFPB) just repealed a set of rules and regulations that were put in place to protect payday loan borrowers
5 Common Myths About Car Title Loans You Should Know About
Car title loans are a common way to get quick cash for the value of your car. But because of this, there are a lot of rumors and misconceptions about how they work, and whether or not they’re a good choice if you need cash to cover your emergency expenses.
What is a Loan Shark, Exactly?
A Loan Shark is a Predatory, Unlicensed Moneylender That Takes Advantage of People With Poor Credit. Read More Here >
Here’s the Truth About No Credit Check Loans
Credit scores are the rock of the loan industry. Lenders use them as indicators for whether you’re worth the risk or not to grant a loan. It can be why you are able to purchase a car, cover moving expenses, or be able to start a business.
Big Picture Loans Scores Landmark Victory for Tribal Lenders
A class action lawsuit against Big Picture Loans has been officially canned. The decision was squashed by the Fourth Circuit of the United States government.
Brian Allen
Editor-in-Chief
Brian Allen has been helping people make smarter financial decisions for over 10 years. As the Editor-in-Chief for Goloans, Brian writes about sage financial advice, “how to” articles, and reviews about lenders and creditors.
Leave a Reply