Bad credit loans. You never thought you’d Google that term, but now that some bills are due it’s hard not to. As you look around for a quick solution you see something called payday loans.
“Could payday loans help me?” you wonder. “Or should I avoid them?” If you want to know if you should avoid payday loans, read on.
Payday lenders can legally charge borrowers an interest rate of 400% on their loan.
What Are Payday Loans?
Payday loans are pretty simple. They’re called payday loans because you typically pay the loan off on your payday. Here is how it works:
Suppose you have a decent job. It pays pretty well, but the credit card payment is coming up fast. So you go to a payday lender and fill out some forms. You walk out with the money you need and things seem pretty good, right? Wrong.
Below we’re going to go over the pitfalls of payday loans and why you should avoid them.
The Payday Problem
At the outset, payday loans look great. Like the situation we laid out above, you got the money to pay your credit card bill and could pay the payday loan back quickly. Or could you?
The problem with payday loans is they’re short. Lenders who fund these loans typically get their money back within the month. So how can a lender make money on such a short-term loan? By charging interest rates around 400% Yes, you read that right.
Payday lenders can legally charge borrowers an interest rate of 400% on their loan. That means instead of just paying back the loan, you’d also pay massive interest fees on top of that.
Rollovers create an unending cycle of debt that’s hard to get out of.
The fees are so massive that borrowers often have to borrow more money just to pay for the loan. This is called a rollover. And with all the rollovers payday borrowers do, they never really pay down the loan. They just create an unending cycle of debt they can’t get out of.
What makes matters even worse for borrowers is that payday loans are easy to get. As long as you have a paycheck and a bank account, you’re in. There’s no talk of repayment plans, or even if the loan is right for you. There are just a few short forms to fill out.
With payday loans being so easy to get, borrowers often don’t stop to figure out a better financial plan. And why would they? If it’s easy to get the money you need on the fly, why bother looking into other options? Unfortunately, rollovers aren’t the only problem with payday loans.
Payday Loans Are Small
Another huge problem with payday loans is the amount. Suppose you come home from work one day to find a huge credit card bill in the mail. You didn’t go on a spending spree, just a lot of small purchases started adding up. Now you have to That’s because payday lenders don’t do the large amounts businesses owners like yourself would need. So what can you do instead?
Consider Loans from Alternative Financiers
If you have bad credit you may think payday loans are the only answer. But there is another way to get the bad credit loans you need: Alternative financiers.
Alternative financiers can not only finance the amount you need, but they can also craft the loan to suit you. Instead of rushing to pay off the loan with your paychecks, you’ll have a more relaxed repayment plan with terms that help you. Plus, each payment you make toward the loan helps you rebuilt credit.
So if you need bad credit loans for your business, consider an alternative lender today.
Get the Bad Credit Loans You Need From First Capital Business Finance!
If you need bad credit loans for your business, speak with the financial experts at First Capital Business Finance. It just takes a few minutes to get pre-qualified over the phone!
Simply call us at8888-565-6692 or click below to finance your future.
First Capital Business Finance is committed to helping you meet your cash flow needs to grow your business. We serve small and middle market businesses and large corporations with range of loan and financing options