Answers to Frequently Asked Questions About Bad Credit Payday Loans in Advance

Aug 19 20:38 2014 Montans Meka Print This Article

There is nothing good about having bad credit. People think that you are shady, banks don't want to lend to you and it may even be hard to find a job. This means that you need to take action to get your credit score back to where you want it to be.

Many consumers who are considering using bad credit payday loans for their short-term financial needs have questions about these loans. As a result,Guest Posting please read these answers to some frequently asked questions about bad credit payday loans that can help you resolve many questions people have about these loans.

How do lenders determine the interest rates for these loans?

Most lenders who offer bad credit loans to consumers use statistical formulas to determine the interest rates for bad credit short-term loans. These statistical formulas use information about loan default rates, payment rates, loan amounts and other factors to determine how much interest to charge for a bad credit loan. Many of these formulas are updated regularly to ensure their accuracy.

Why do lenders charge high interest rates for these loans?

Lenders typically charge high interest rates for bad credit payday loans because they believe this is the best way to compensate for the risks that are associated with lending money on a short-term basis to people who have credit problems. This is not surprising because a joint study conducted by the Vanderbilt University School Law and Oxford University conducted in 2007 reports that the average default rate for many payday loans can be as high as 6 percent each year.

How do consumers apply for these loans?

Consumers can apply for a bad credit short-term loan by filling out an application that takes less than 30 minutes to complete in most cases. Many consumers believe that filling out this application is simple. This is easy to understand because most lenders ask borrowers to provide information about their banking history, finances and income history during the application process.

What laws protect consumers who use these loans?

There are several state and federal laws that protect consumers who use a bad credit cash advance to meet their short-term financial needs. The most important law that protect consumers who use bad credit cash advances is the federal government's Truth in Lending Act. This act forces lenders to provide full disclosure of a bad credit cash advance's administrative fees, interest rates and payment options. It also requires full disclosure of any changes to a bad credit cash advance's payment terms that could impact a consumer's ability to repay a cash advance on time.

Moreover, there are hundreds of state consumer protection laws that protect consumers from unscrupulous lenders who charge excessively high interest rates and questionable fees. Consumers can find information about these laws by contacting their state's attorney general office for more details.

What repayment options are available?:

Most lenders offer a convenient online payment process that enables consumers to repay a bad credit cash advance quickly. This payment process requires scheduling a payment at least two days before a bad credit cash advance is due to ensure it is processed on time. Many consumers believe this is the easiest way to repay bad credit payday loans because they can schedule their payments quickly using their banks' online payment system.

Moreover, some lenders who offer bad credit cash advances to rural clients offer a payment process that allows consumers to make payments at the lenders' stores or offices. Some consumers prefer using this payment option because they believe that it is the fastest way to pay a bad credit cash advance on time.

Finally, do people need steady employment in order to qualify for these loans?

Most people do not need steady employment to qualify for most bad credit cash advances. This is the case because most lenders use information about a person's income to determine a client's ability to repay a bad credit cash advance on time. As a result, people who receive Social Security benefits, pensions and other forms of income on a regular basis can qualify for a bad credit cash advance that meets their needs.

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