Article Advise

submitted: May 13th 2008 | by: ChrisChanning | Total views: 3 | Word Count: 519 | |

Bad credit loans are loans that can be acquired by a person who has bad or poor credit. It is actually possible for a person with bad credit to get a normal loan but the interest rate would be much higher for them than compared to that of a person with good credit. The most common type of bad credit loans are known as payday loans

A payday loan is a loan that is intended to cover a borrower's expenses until their next payday. Payday loans may also be called a payday advance or a paycheck advance. Normally payday loans are between $100 and $500 and are due in two weeks. Payday loans also have a higher interest rate of up to 400% APR. There are two ways to get payday loans, through retail lending and internet lending.

Retail Lending

A borrower will visit a payday lending store to secure a small loan with full payment due at their next paycheck. Typically the finance charges for a payday loan range from $15 to $30 per $100 borrowed. This causes the rates to range from 390% to 780% APR. The borrower writes a check to the lender in the full amount of the loan and fees and is generally expected to pay the loan back in person when the payment is due. If the borrower chooses not to repay it in person then the lender can process the check through the borrower's checking account.

The borrower will receive a bounced check fee from their bank if they do not have the funds to cover the payment. Additional fees may also be charged to the borrower from the lender such as an increased interest rate. In the case that the borrower cannot pay they will be offered an extended payment plan for no additional cost by members of the national trade association.

Internet Lending

Through internet lending a consumer will fill out an application online. Another option is that the consumer can fax a complete application with personal information, employer information, bank account numbers, and their social security number on it. The borrower will also fax a recent bank statement, a copy of a check, and signed paper work. The online lender will directly deposit the loan into the borrower's checking account and they payment and charges will be electronically withdrawn on the borrower's next payday. You can find internet payday loans through e-mails, paid ads, referrals, and online search engines.

In conclusion a credit loan that someone with poor credit can get his considered a bad credit loan. People with bad credit can still get normal loans but the interest rate will generally be much higher than for someone with good credit. Payday loans are the most common loans that are considered bad. Payday loans come with high interest rates and high APR. You can get a payday loan through a retailer or through the internet. If you fail to pay back the loan on your next payday then you will have some extra fees to cover. Also if you fail to pay then you will be offered an extended payment plan for no additional cost.

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Find out more about bad credit auto loans and bad credit loans.

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