It has been observed that almost 60 percent of Americans do not even have $500 in their checking account, and also have a poor credit rating. As a result, in all likelihood, they do not even have a credit card to help them in case of any exigency. These people have many reasons to worry, but getting quick money in case of a financial emergency is not one of them. View – Online payday loans for bad credit are readily available nowadays in all states and are sometimes disbursed in as less as 1 day.
A payday loan is essentially a loan that is taken from a lender until the borrower receives his next salary. The borrower only has to give a post-dated cheque to the lender for the amount borrowed plus the applicable interest rate and charges.
Though on the face of it, this may seem very attractive, it is important to know that payday loans can be very heavy on your pocket, and you may not realize how much you end up paying for them.
Difference between offline and Online payday loans for bad credit
Offline payday loans are the loans that are given by brick-and-mortar agencies like banks, small companies, and stores. To get a loan from these places, the borrower has to visit in person, get all his documents verified, give a post-dated cheque, and, in turn, receive a cheque from the lender.
An online payday loan for bad credit, on the other hand, does not require the borrower to go anywhere and can be applied for from the comfort of his home. The borrower only has to fill some information online, like his social security number, bank account details, and contact details. Though the process of applying for a payday loan online seems easier as compared to visiting a place, it is important to understand that the borrower ends up providing a lot of information online, and runs the risk of his information being leaked and used by impostors.
A lot of times, the companies advertising about online payday loans for bad credit are not online lenders, but what is called ‘lead generators.’ Let us understand what a lead generator is.
Lead Generators
Lead generators are online companies that act as an agent in between the borrower and lender for an online payday loan for bad credit. When a borrower tries to apply for a payday loan online, he needs to enter his contact information, bank account details, and social security number. The lead generators then share these details with a number of lenders. The lenders then approach the borrower with their loan offer.
Some lead generator companies advertise themselves by claiming that they can get a borrower the best and cheapest online payday loan for bad credit. However, this does not necessarily happen all the time because these companies only provide the information to the lenders. On the contrary, the borrowers start receiving innumerable calls from various lenders and end up getting irritated and flustered.
Moreover, borrower’s highly confidential information is circulated all across the internet to various companies, and this can lead to major security breaches. Lead generator companies do not even follow the regulations imposed by the state governments and thus are not careful with handling of the borrower’s data.
Factors to consider when applying for a payday loan
The first and the most important thing that a borrower needs to consider before applying for a payday loan is his ability to pay back the loan. Since these loans are costly, repaying them can be much tougher than they think. It does not make sense to take a payday loan if the borrower can instead get the money from some family or friends, or ask for a paycheck earlier.
Next, the borrower needs to be clear whether he wants to take an online payday loan for bad credit from an actual lender directly, or apply through a lead generator. Getting a loan through a lead generator is riskier and more stressful.
Finally, the borrower needs to check that the lender has a valid license issued by the right government authority. He should also verify the authenticity of the lender by looking at details such as the lender’s office address and contact number, and validating them before proceeding with the loan application.
