Friday, 31 May 2013

Using Payday Loans For Bad Credit Management: There Are Better Options Out There

The financial difficulties that we all face are not small matters. These days, simply meeting our regular bills is something of a challenge, and dealing with these commitments can drive some people to desperate measures, such as taking out a payday loan for bad credit management purposes.
In fact, getting a loan under such terms is something of a knee-jerk reaction to counter mounting pressure. Rarely, if ever, will such a move alleviate the problem, and often it leads to a worse situation which prompts the borrower to opt for bankruptcy. It is possible to avoid declaring bankruptcy completely.
But exactly why is a payday loan such a bad option when it is arguably the most accessible loan type for bad credit borrowers? Well, while they do have their uses, there other options to consider that are more proactive solutions, and come with far less associated pressure.

Why Payday Loans May Not Work
Taking out a payday loan for bad credit management purposes can create more problems than it solves. For a start, the interest rate that is typically charged on this kind of loan is extremely high, ranging between 30% and 50%, depending on the lender.
What is more, the amount of time that is given to clear the debt in full is extremely short, with as little as 14 days stipulated in some contracts. This is because the loan is granted against an upcoming paycheck. And with so little time and such high interest, pressure increases dramatically, so that in the long run, it becomes difficult to avoid declaring bankruptcy.
Anyway, the size of a payday loan is small. The maximum available is $1,500, which is enough to deal with a financial emergency. And since full repayment ($1,950) is taken from a paycheck, there is little left to deal with regular monthly obligations.

Why Payday Loans May Work
Of course, there are situations where using a payday loan for bad credit management is a perfectly viable option.
For example, because they are granted with no credit checks, even applicants with the worst credit history can access the funds.
It is also possible to get the funds very quickly, with the approval process taking as little as a few minutes. This is because the only condition is that the monthly paycheck is large enough to repay the loan in full. So, once confirmation of income is provided, the lender will grant the funds.
The ambition to avoid declaring bankruptcy can also be served if the funds are used to deal with an emergency debt, which would otherwise throw finances into chaos. For example, if $1,000 is secured through a payday loan, it can be used to ensure a mortgage payment is made, or final notice on a credit card debt is dealt with.

Other Solutions To The Problem
Of course, there are those who believe bankruptcy is a practical solution to an impossible financial situation, and if getting payday loans for bad credit management purposes fails, it is hard to avoid the fate. But there are other options to consider too.
It is possible to avoid declaring bankruptcy if a consolidation loan is secured instead. This offers a constructive solution to debt problems by clearing all debts in one go and replacing them with a single loan. If the term is long enough, then the repayments can be as much as 50% less than the original monthly obligation.
It might seem that a payday loan is the only viable option before bankruptcy, but that is not true. So, take some time to consider a consolidation loan - which can be approved within 24 hours - before jumping to the highly-expensive payday option.
Hilary Bowman is a Financial Expert who specializes in 1 Month Loans and Payday Loans No Credit Check

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Cash Advance Loans Quickly Fix Small Money Problems

How do you know that it is time to search for cash advance loans when looking at your finances? If there is an impending bill and no available cash to support the payment, then you know it is at least time to look for some sort of solution. Since these short-term loans charge a fee per $100 borrowed, a first glance at money solutions might be ones that are free.

Not many money options are free. Hopefully you have prepared for money emergencies by building your own emergency fund. Using your own money that is earmarked for unexpected bills is the best option when available. When people are living paycheck to paycheck, finding money to put into savings is not such an easy thing to do. It isn't just overspending which contributes to money problems. Let's face it. The cost of living continues to rise at a faster rate than people's salaries. 3 Month Loans end up helping many individuals bridge the gap between bill due dates and the next paycheck.

Another over-used option that hustles and bustles around unexpected costs are credit cards. These cards are a simple way to charge a doctor's visit, groceries or fuel when the bank account is low. The purchase costs will be dealt with when the credit card statement comes around. More often than not, the payment towards the new credit card bill is the minimum requirement. Unpaid balances left out over the long-term continue to accrue interest as well as leave a person's credit utilization rate higher than what it could be if the balances were paid in full.

If credit is a current problem or there is a need to protect the score/history, borrowers will seek out best cash advance loan lenders in order to keep the credit utilization rate down and the late debt off the report. Just as these loans are no credit check access to cash, the loan itself does not get reported as debt. Why would a company pay money to record debt when it is going to be paid off in just a few short weeks? The only way your short-term loan debt would ever be found on the report is if a person goes into default on the loan and it lands in the hands of a bill collector. That won't help your credit score one bit.

The way our economy has been going, there are too many people living paycheck to paycheck, have bad credit, are limited in credit card usage and a savings account just never made it into the plan. It is folks like these who end up seeking out the fast money. How do they know it is time to do so? All other avenues have been shut down and they don't want one more bad marks on their history. The fact that people are trying to improve their situation reflects in their efforts to fix the small money problems before they become disasters. A cash advance loan online may not be the best solution for everybody's situation, but when it does work, the cash emergencies are taken care of promptly.

Spotya! Cash Advance Loans does not advocate using a payday loan for just any type of spending. Visit for more information on payday loans.

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