Most financial institutions don’t offer guaranteed unsecured loans to adverse credit customers. Lenders usually want a bad credit history loan to be backed-up with collateral, such as a house or car, before they will approve it. This enables the lender to recover its money in the event of default. It is important to appreciate that default rates grow quickly as a credit score drops. A quick payday loan provides a potential alternative to the norm as it is a fast no credit check loan.
Who is Eligible for a Guaranteed Unsecured Loan?
Although they’ve been criticised, payday lenders assist a section of the community that has been rejected by the banks. Rather than credit scoring applicants, they used a different set of lending criteria. Lenders offer fast easy loans to customers who are able to prove their identity and can afford the repayment. A quick payday loan is not a suitable for everyone, but will be granted to people who are able to meet the following eligibility criteria:
- Must be a U.S. citizen.
- A minimum of 18-years of age.
- Full-time employment.
- Two forms of identification.
- Valid checking account.
If these criteria are complied with, the customer will provide the lender with a postdated check for a sufficient sum of money to cover the principal and interest. The money won’t be provided in cash, it will be sent directly via bank transfer within 24 hours.
The Cost of Quick Payday Loan
The cost of borrowing doesn’t just vary between lenders, it is often determined by state law. The majority of customers can expect to pay $25 per month on every $100 that is borrowed. To put this into perspective, a quick bad credit loan for $500 will accrue $125 of interest in just 30 days.
Consequences of Defaulting on a Bad Credit History Loan
Although defaulting won’t lead to the loss of a home or car, failing to repay the debt will lead to interest and charges accruing quickly. It may be possible to extend the borrowing term but, due to the high cost of borrowing, this isn’t a recommended strategy. Others tackle guaranteed unsecured loans with a debt free solution, such as a debt settlement program, filing for bankruptcy or a debt management plan.
Paying Off a Quick Payday Loan
There are loans for unemployed people on the market, but they will require the provision of an item of value to secure the loan. Think carefully before borrowing money without a way to repay the debt because, if finances are tight now, things are certain to become more difficult. A quick payday loan is only right for customers who expect a cash injection from a bonus or over-time the next month. If this isn’t the case, seek advice and assistance from a credit counseling service.