Among the most popular types of loan these days are the so-called bad credit loans, or what most financial experts term as payday advances. As the name implies, bad credit loans or payday advances are loans that you can easily and quickly acquire online regardless of how excellent or poor your credit standing is. The catch though is that you have to pay back the loan within a couple of weeks or when your next paycheck comes. Also, compared with regular types of loan, like credit cards and bank loans, bad credit loans have much higher interest rates. Despite these drawbacks, however, they continue to grow in popularity, and the growing number consumers, as well as payday advance lenders that continue to emerge online, will attest to the fact that there is no stopping the growth of this industry.
Bad Credit Loans versus Credit Cards
Compared with credit cards, it is much easier and faster to acquire bad credit loans. With credit cards, there are a couple of information and requirements that you need to submit, and oftentimes you have to personally do it and talk to a representative before you can be granted card. Also, you might have to wait for a couple of days, and even weeks, before you can get notified that your card application has been approved. Importantly, if you have poor records, your chances of getting approved is very low, and most of the time, you have no chance at all.
Bad Credit Loans versus Traditional Bank Loans
Like credit cards, taking out bank loans may require a couple of information, as well as documents to support the information you have provided. Also, banks have tougher rules and requirements when it comes to granting loans, and although it varies from one bank to another, the process generally takes long and it can take weeks, and even months, before you can get your funds. Some banks may also require collateral, something that you can pledge to the bank in the event that you become unable to pay back the loan.
Why Bad Credit Loans Are Better
With bad credit loans, however, it doesn’t matter whether you have stellar or poor score as your chances of approval will not be based on this aspect, but rather on your ability to pay back the loan. You also don’t have to pledge any form of collateral. That being said, it is important that you provide lenders with information about your source of income. You would also have to provide your name and address, as well as bank details where the funds will be deposited. The best part of taking out bad credit loans is that everything is done online; you won’t have to go out and personally see a representative.