Automotive Journal

A loan that a person with bad credit can get is normally a bad credit loan. It is possible for a person with poor credit to get a normal loan but the interest rate would be higher than normal. Payday loans are the most known type of bad credit loans.

A payday loan is a loan that is intended to cover a borrower’s expenses until their next payday. Payday loans may also be called a payday advance or a paycheck advance. Normally payday loans are between $100 and $500 and are due in two weeks. Payday loans also have a higher interest rate of up to 400% APR. There are two ways to get payday loans, through retail lending and internet lending.

Retail Lending

Through retail lending a borrower goes to a payday lending store and secures a small loan that they must pay back on their next pay day. The payday loan will generally come with finance charges ranging from $15 to $30 per $100 borrowed. This means the rates range from 390% to 780% APR. The borrower will write a check to the lender in the full amount of the loan along with fees and will normally pay it back in person when the payment is due. The lender can process the check through the borrower’s checking account if they choose not to make the payment in person.

If a borrower’s account is short on funds and cannot cover the check then the borrower will have a bounced check fee from their bank. The loan may also have additional fees and an increased interest rate due to failure to pay. Members of the national trade association are required to offer extended payment plans for no additional cost to people who cannot pay back the loan when it is due.

Internet Lending

With internet lending you fill out an online application or you can fax a complete application that requests personal information, employer information, social security number, and bank account numbers. A copy of a check, recent bank statement, and signed paper work is then faxed by the borrower. The online lender will directly deposit the loan in the consumer’s checking account and electronically withdraw the payment and charges on the borrower’s next payday. The best way to find internet payday loans is through, paid ads, referrals, e-mails, and by searching online.

In conclusion a credit loan that someone with poor credit can get his considered a bad credit loan. People with bad credit can still get normal loans but the interest rate will generally be much higher than for someone with good credit. Payday loans are the most common loans that are considered bad. Payday loans come with high interest rates and high APR. You can get a payday loan through a retailer or through the internet. If you fail to pay back the loan on your next payday then you will have some extra fees to cover. Also if you fail to pay then you will be offered an extended payment plan for no additional cost.