Disadvantages of payday loans

disadvantages of payday loans

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If you have bad credit or have been refused elsewhere a bad credit loan can come in handy. However, make sure you know the facts before you apply.

Have Bad Credit? You are not alone

Bad credit affects a lot of people.

Credit reports are easily damaged, simply by missing credit card and loan payments you can damage your score. Having a poor credit rating will be used against you when you apply for financial products like loans and credit cards. This is because people with bad credit reports are considered to be more of a risk. People with better credit histories are not only more likely to get accepted for the products they want but they will also be offered better loan conditions.

What are you loan options if you want a loan but have been refused elsewhere?

What is a Bad Credit Loan?

A bad credit loan is especially designed for people with a bad credit history and those who have been refused for a loan elsewhere. When compared to a payday loan you will find you can borrow more money for more time with a bad credit loan.

Bad Credit Loans can help you rebuild your credit rating

Many bad credit loans come with useful credit rebuilding facilities. You can rebuild your credit rating or if you have no credit rating start from scratch. As long as you are responsible and

make payments on time your credit rating will improve which will result in better loan conditions in time. With a better credit rating you will be able to borrow more money and be offered lower interest rates in the future.

Treat Bad Credit Loans with caution

The main disadvantage of a bad credit loan is the interest rate. These loans come with notoriously high interest rates because lenders see you as high risk because of your financial history.

You need to make sure you make your payments on time because if you default on the loan repayments not only could you fall into debt but you will damage your credit rating even further. As the interest rates are high and late payment charges can be expensive the debt can easily accumulate.

Be careful with secured bad credit loans because if you miss payments then ultimately you could have the asset you put against the loan taken away from you.

Where to find Bad Credit Loans

There are a lot of bad credit loans on the market. You need to make sure you find a loan that has reasonable interest rates and is clear in its terms and conditions.

Compare lenders in the table above to find the loan most suited to you.

Things to remember when comparing bad credit loans

The interest rates offered to those with a poor credit history is usually significantly higher than those advertised with high street banks. It is important that you compare the headline rate with bad credit loans, not any promotions or examples. The longer you take to repay the loan the more you will ultimately repay.

Source: www.whichwaytopay.co.za

Category: Payday loans

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