There probably isn’t an American adult alive today who hasn’t heard the term payday loan at some point in their lives. While many people don’t ever have to worry about taking out emergency loans, not everyone has that rare luxury.
The sad fact is, the majority of Americans fall squarely in the middle to lower income brackets, and most of them live their lives paycheck to paycheck. This means that if there is an emergency, the chances are high that they don’t have enough money in the bank to cover it.
So, what is a family in crisis to do? Your first thought might be to apply for a few credit cards or take out a personal loan to get you through the next few months. These are great options, if you have good credit. Unfortunately, credit is something else many Americans struggle with.
Does this sound like a boat you’re currently in? The good news is, online payday loans bad credit options are a thing for people who have a low credit score, or even no credit, and it is easier than ever to get quick payday loans online in Dallas or elsewhere.
How is It Possible to Get a Loan With Bad Credit?
Many people are surprised to learn that it is entirely possible to get a loan with bad credit, or even no credit at all. What they don’t know for sure is just how the whole process works. After all, the big financial companies and credit card issuers do big business by doing credit checks. How is it possible for folks with bad or no credit to be getting loans?
You’ll be happy to know that it really isn’t as complicated as it might sound. You see, when a credit card company or other financial institution checks your credit score, they’re deciding whether they want to do business with you based on your trustworthiness. Your credit score is a reflection of how you handle your finances, and a high score means you’re likely to pay back all of your bills on time.
If you have a low credit score, the biggest majority of these businesses most likely won’t lend to you, or issue you an unsecured credit card. How, then, do people with bad or no credit get payday loans? Simple, payday lenders aren’t using their credit scores to determine whether or not to approve them.
If They’re Not Using Credit Scores, What Are They Using?
Payday loans are meant to be used as a way for people to get by financially for a week or two without going completely broke. The term payday loan stems from the fact that usually, the loan is for a relatively small amount of money that is due to be paid back in a week or two, normally on your next payday.
Since payday lenders aren’t usually loaning out more than $500 or $1000 to individual lenders at a time, they don’t use your credit score, but instead, your income. This is why it is so vitally important to make sure you have a consistent source of income that can be easily verified when you are shopping around for payday loans online.
When making your loan decision, the lender will take your employment and overall income into consideration and weigh it against the amount of money you’re looking to borrow. If the lender thinks you’ll be able to pay your loan back by your next payday, then your loan will typically be approved.
What if I’m Approved?
Make sure you write down all of your bank account information accurately, because you’re going to need to provide it to the lender to receive your loan. Most online lender use direct deposit to send your money over when your loan is approved, so you’ll need to provide the name of your bank, your account number, and your bank’s transit routing number.
If you’re approved, it usually doesn’t take very long to see your funds start to arrive in your bank account. Depending on which lender they chose, most borrowers typically see their loan being deposited into their bank account anywhere from a few minutes to a couple of hours after the notification of loan approval.
Could Paying My Loan Off Help My Credit?
This question depends entirely on the lender you choose, but it is certainly possible. Some online payday lenders do report to the three major credit bureaus (Experian, Equifax, and TransUnion). To find out if your chosen lender will report your on-time loan payment so that you can work on building your score, just do your research on the lender.
For payday loans and other types of unsecured loans, you’ll find that several lenders do report to the bureaus, and that is a great motivator to pay your loan off on time so that you can begin building your credit back up to where you’d like it. After all, when you get your credit built up, you’ll notice many more financial options beginning to open up for you.
