Many people think that bad credit prevents them from qualifying for any type of personal loan, but this isn’t true.Payday loans and installment payday loans are two types of personal loans for bad credit.These loans don’t require tons of paperwork and, unlike traditional loans, you shouldn’t fall further into debt that you can’t repay. You can apply for a payday loan at a service center or online. Some people prefer the confidentiality of applying online, but either way will get you the money you need.
What Is a Payday Loan?
A payday loan is a loan that allows you to borrow money from a lender with the promise that you will repay the loan within 30 days. You must prove that you have a job and a bank account in order to qualify for a payday loan. The lender will take your banking information and automatically deduct the loan amount from your account on the payment due date. Some people look at payday loans as an advance on their paychecks.
What Is a Payday Installment Loan?
With personal loans for bad credit, lenders understand that you may not be able to pay back the borrowed amount in full within one month. Installment payday loans allow you to pay the amount back in bi-weekly payments instead of one lump sum. The lender will work out the repayment arrangements with you, explaining interest rates and fees associated with an installment plan, and the money owed will automatically deduct from your bank account.
This is a great solution if you need money fast but your next paycheck will not cover the amount you need to borrow. Most lenders can work out a repayment arrangement that allows you to repay the borrowed amount and still have money left over. You don’t have to worry about the lender taking all of your next paycheck to pay back the loan.
How to Choose the Right Loan
The biggest question you may have about personal loans for bad credit is which loan is right for you. If you don’t need to borrow a large amount and know that your next paycheck could repay the borrowed amount, a payday loan would work fine. If you need a larger amount than your next paycheck could cover, you’ll do better with an installment loan. Just remember that you can’t rebuild your credit using personal loans for bad credit, so make wise borrowing decisions when taking out a loan.
