If you're one of the millions of Americans who are looking for bad credit loans, then you might be considering getting a payday loan.
In fact, this is one of the most common type of loans that people with bad credit will get, but before you do, you need to consider what you're going to really be getting into.
Did you know that payday loans can actually wind up costing you more than you bargained for?
Think of this: if you have a bit of a financial pickle and you have bad credit, you think it's a good idea to get a payday advance loan. You're thinking, "Well, I just need to make it through so no checks bounce until next week when I get paid." So, you get a payday loan to cover expenses.
Everything's good right? Well, your payday loan comes out to about half of your paycheck with the fees that you'll pay. Sure, the one fee wasn't so bad, but when you went to get the loan, you found out that you needed just a little bit more to cover your other expenses. Now, you're faced with having to do without half of your check, but you have bills to pay. So, you decide that it might be a good idea to get an extension on that bad credit loan.
Okay, no problem right?
Well, now that you've renewed your loan, you have double fees – plus, you'll probably be faced with a penalty of some kind. Now, you're paying 75% of your next paycheck, but that's your mortgage check and you need it. Do you see where this is going?
This is what happens with many different types of bad credit loans and it is why so many people get into so much trouble with their payday loans. A better solution might be to see what you can do about putting a good solid budget in place and saving up some emergency money for a while.
Now, we know that you have bills to pay, but if you're really facing a financial issue, you might be able to talk to your creditors to see if you can get an extension of some kind. In some cases, if you've done well with paying your bills up until now, you will find that your creditors and/or lenders will let you skip a payment. On loans, this payment is tacked to the end, with credit cards, it's up to your creditor and you may have to pay more interest on the balance, but sometimes you will find that your creditors will do this for you.
In the end, if you have a financial situation and need some time to regroup and get back on track, a bad credit loan may not be the way for you to go, so why not check out some of your other options so that you can keep your wallet and credit on track for the long-term?
If you want more info on how to avoid bad credit loans and some great credit advise
Good luck with your voyage towards better credit and I hope you can avoid the bad credit loans!
If you have't seen this yet, check out Jeremy Maher's free credit repair presentation
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