subject: Explore Your Options With Low Credit Score Lenders [print this page] It can happen before we know itIt can happen before we know it. And when it happens, it is completely devastating. When the all-important credit score calculated by the three primary credit reporting agencies that is associated with our personal name drops down into a range of numbers that lenders don't respect, our financial lives can change in a hurry. Although it can cost us our historical relationships with bank and credit union loan officers, there is definitely still hope. There are many low credit score lenders waiting to help us up and out of our financial pitfall.
If you are suffering from the consequences of circumstances that interfered with your ability to pay your monthly bills and installment loans on time, then you may be interested in this article. The frustration and downright embarrassment of being turned down for a loan at the places where you've done business for years can be truly aggravating. At times it can seem a little bit hopeless, and you might not know where to turn to get a loan in times of emergencies. If that feeling is familiar to you, then learning about low credit score lenders should surely be on your list of priorities.
Credit scores are not compassionate or forgiving. They are calculated by computer programs that use the database of information about each individual. Naturally, the information in the database at each credit reporting company is subject to error. One reason errors occur with great regularity is the fact that there are usually quite a few people with the same name, and sometimes their information is misapplied. Mistakes on your credit report can be corrected, but it takes a concerted effort and a considerable amount of time to make each correction. There are companies that will deal with the credit reporting agencies on your behalf, and they will work to see that errors are removed and corrected. But of course that costs money, too, since the credit repair companies are in business to make money.
The reason that low credit score lenders can afford to make loans to people who are unable to obtain loans from banks, credit unions and credit card advances is because the business model they employ provides them with a difference source of security. Because they do not investigate you credit score, and they do not rely on any credit reporting in the loan approval process, they have to secure their interests in the money they are loaning out in another manner. Although there are variations on the theme in some states (since each state has its own regulations for these special short term loans) the usual business model involves an automatic debit on your bank account. In other words, your lender is assured loan repayment of a certain amount of money on a certain date because your bank has been instructed and will be required to make that payment. This is the agreement specified in your loan documentation and affirmed by your signature and initials on each page.
Low credit score lenders are often called payday lenders, cash advance lenders, quick lenders and EZ lenders. All these names refer to other qualities of the short term loans that some call low credit score loans. "Payday lenders" is the name most people use, and in fact the lenders often advertise with that name because it is the most common, and it actually makes the most sense. Loans come due on the borrower's next payday, in most cases, so the reason for that name is pretty obvious. Some working adults have weekly paydays, and others are paid bi-weekly or monthly. Whatever the time period may be, and at whatever point in time a borrow signs a loan agreement and receives loan funds, the due date of his or her loan will be that next payday, irrespective of the number of days involved. This is completely different than the way installment loans work, and so it is unfamiliar to most borrowers the first time around. Preparing yourself to understand and to follow the terms and conditions of your short term loa
n is the best way to make it work out for you whenever you need fast cash without the use of a credit score.
Payday lenders charge more interest than banks and credit unions, and more than credit card cash advances as well. They are in business to serve a population that has few alternatives, and so the Annual Percentage Rate (APR) is very high. Two important things should be clear before obtaining a cash advance loan when you need it. Those two things are: one, consider all your alternatives before you choose to fill out an application and get a payday loan; and two, make sure you are prepared to repay your entire loan amount, plus interest and fees on the date your next paycheck will arrive.
Whether or not your paycheck is automatically deposited into your bank account, be absolutely certain it gets deposited right away so that the automatic debit to which you have agreed can take place without a hitch. A third thing that is also very important should be mentioned here. It is the fact that there will undoubtedly be overdraft fees from your bank and additional penalties from your lender if sufficient money is not on deposit at the time the automatic withdrawal attempt is made. Borrowers need to budget carefully for loan repayment on their next payday, although in most cases the loan can be renewed upon payment of the interest and fees only. Careful planning and follow-through will control whether or not you have a good experience when you explore low credit score lenders for yourself.
Don't fail to consider all your other bills and expenses that will be due on payday. It's really important to take into consideration the effect that repayment of your entire loan will have on your budgeting, and if there's no way it is going to work out, by all means get in touch with your lender before the auto debit occurs in order to avoid overdraft fees from your bank. Thinking and planning ahead will save you additional expense and allow you to use the money wisely when you take advantage of short term loans from payday lenders.
