The presence of payday loan lenders has modernized the way consumers borrow money these days. Gone are the days when you have to wait in long lines to talk to a bank rep, and then wait for weeks for your application to get approved. With payday advances, all the processes are done online, and you can have your money deposited to your bank account within hours. You don’t even have to have a good credit standing just to get approved of these loans. Bad credit loan lenders – another term for payday advance lenders – do no credit check and can provide the money you need in an instant, regardless of your payment history.
Speed and convenience are indeed the two main aspects that differentiate banks and bad credit loan lenders. But here are some other reasons why bad credit loan lenders have become the better alternative to banks.
Bad Credit Loan Lenders Require No Collateral
Banks require you to pledge an asset as a form of collateral – usually automobile, investment, and valuables and collectibles – which you would have to give to the bank in the event that you weren’t able to pay back. With bad credit lenders, there is no such thing. They, however, charge fees for late payment, on top of the borrowed amount and the interest rate.
Bad Credit Loan Lenders Require No Supporting Documents
Banks require that you submit documentations that prove you have a steady source of income. These may include bank statements, tax returns, and paycheck stubs. Meanwhile, bad credit loan lenders only require basic information that includes your name and address, employment information, and bank account details. You no longer have to fax any supporting documents.
Bad Credit Loan Lenders Require No Co-signer
To be eligible for the loan, banks would require that you have a co-signer or a joint applicant. For bank loans, this is a requirement especially if you have short or a not-so-good financial history. Along with checking and evaluating your application, loan reps will also check your co-signers’ information. This isn’t the case for bad credit loan lenders. What matters most for them is that you are able to pay back, which they can easily figure by checking and evaluating the information you provide them.
For speed, convenience, and ease of application, there is no doubt that bad credit loan lenders indeed provide a better method of borrowing money. These three factors are, in fact, what make bad credit loan lenders the better option these days, and why their popularity continues to grow.
Bad credit loan lenders have also become more available online, providing you more options and giving you instant solution should the need for urgent cash comes up. Note, however, that compared with bank loans and other traditional types of loans, bad credit loan lenders generally charge higher interest rates. Bad credit loan lenders may also require that you pay the loan amount, plus the interest rate, when your next paycheck comes. And as with other types of loans, they also charge fees for late payments.