Who Are Short Term Payday Loans Right For?: Apply for a Bad Credit Loan Until Payday

Short term payday loans were introduced to help poor credit customers get an instant cash advance in the event of a financial emergency. It is a no credit check loan so approval is guaranteed, provided that the applicant is a U.S. citizen, in full-time employment, over 18 years of age, has a valid checking account and can provide 2 forms of identification. Credit scoring is used by traditional lenders to determine the risk of the borrower defaulting.

When is a Loan Until Payday a Good Idea?

A short term payday loan should only be considered in the event of a genuine financial emergency. Examples include paying the rent, utility bills, emergency repairs, food and essential items. Whilst a quick cash advance can be taken out for any purpose, it is rarely a sensible idea to buy electrical goods, pay for a foreign holiday or make an impulse purchase. The exception to this rule is that person is due a bonus, a lump sum payment or additional income due to working over-time. In this instance, buying an item in a sale for a discount that is greater than the cost of borrowing could be worthwhile.

Alternative Quick Cash Loans

  • Credit unions. A non profit organisation that accepts members on the basis of a commonality, such as employment. Subject to affordability, it may be possible to get a short term loan. Credit unions tend to be far more understanding in the event of financial difficulties.
  • Pawnbrokers. A pawn shop offers customers an instant cash advance based on the provision of an item of value, such as gold or silver. It is then the responsibility to redeem the item by clearing the principal and any interest that has accrued. A suitable quick cash loan for the unemployed.
  • Credit card cash advance. Most card providers allow the customer to use some of their credit limit as a cash advance. Although there is a higher APR and charges, it could be cheaper.
  • Overdraft limit. Many people don’t realise that they still have an active checking account. If one can be identified, it may be possible to utilise this facility for an instant cash advance until payday.

The Cost of Short Term Payday Loans

The absence of credit scoring for a quick cash advance means that the lender has to factor in the higher likelihood of default. A loan until payday is also short term which means that there is less scope for the lender to profit. A combination of these factors mean that the cost of borrowing is high. It typically costs $20 to $25 to borrow $100 for a month. Although a no credit check loan can help someone out a financial hole, it leaves less money to pay the bills in future months. It is all too easy to get caught in a cycle of dependency.