When you need to borrow money, it may seem like any option will have to do. This is especially true when you have a bad credit score, and you need to get a loan from some place other than a bank. Unfortunately, there are many options for bad credit loans, but not all of them are a good idea. One such example is a Pay Day Loan, which is one of the worst kinds of bad credit loans. If you are looking to get a bad credit loan, here are the reasons you should avoid getting a Payday Loan.
- Interest Rates – This is the main issue with these types of loans. Payday Loans are over a short period of time, and are generally given to people with low credit ratings. Because of these two factors, the interest rates are very high. You may only borrow a small amount, but by the time the loan is over, you end up paying back much more than you borrowed. There are many bad credit loan options that have lower interest rates than Payday Loans.
- Loan Term – Another problem with Payday Loans is the length of the loan. For most people, you expect to borrow money and have time to pay it back. With this type of loan though you are expected to pay it back when you receive your next paycheck. This can make it hard to play out a repayment strategy, and even harder to pay back the loan.
- Poor Customer Service – When it comes to Payday Loans, the lenders are not very flexible. They know their rates are unreasonable, and they will not alter them if you cannot make a payment. This can lead to a very frustrating experience, and a very hard to pay back loan. Borrowing money and having debt is stressful enough without having a lender that seems like they are out to get you. Remove this headache and go with a lender that is more flexible with its loans.
- Loan Amounts – Fourth on our list is how much you can borrow with a Payday Loan. On one hand, you can only borrow a small amount. This is good because of the high interest rates, but bad if you need more money. If you need a loan for anything substantial, a Payday Loan will not be able to help you out. You are better off looking elsewhere.
- Better Options – Lastly, a big reason you should avoid Payday Loans is that there are simply better options. Doorstep Loans, Logbook Loans, and Guarantor Loans can all provide you with the money that you need, at a reasonable rate. For many people, when they get a Payday Loan, they need to turn to one of these types of loans eventually anyway for help paying off the first loan. Do yourself a favor and look into other bad credit loan options instead of a Payday Loan.
As you can see, there are plenty of reasons why you should avoid a Payday Loan. We know how hard it can be to be in debt, but it doesn’t have to be as difficult as Payday Loan lenders make it. Hopefully this article will convince you to go with another option so that your lending experience is a little better.