Bad Credit Loans Ensure Financial Stability for All Lifestyles
It’s never easy to deal with financial emergencies, regardless of income or lifestyle. Payday loans are an option for everyone, but people can get even more flexibility with bad credit loans that offer installment payments. It’s easy to qualify for up to $1,000 without stressful loan applications, providing collateral or long processing delays. Instead of paying back the whole loan from the next paycheck, the borrowers can repay their loans in affordable installments, which helps to manage any cash crisis. These loans give borrowers even more options for handling emergency needs for extra cash without needing to take out more than a single loan.
Higher interest loans for people who have bad credit remain immensely popular with the core group of people who use them. Bad credit ratings can affect anyone who suffers a setback and has few or no available resources to manage financial emergencies. Bad credit prevents people from getting traditional loans, and despite the posturing and criticism of the payday loan industry, too many businesses and traditional lenders earn millions of dollars from late fees, penalties, foreclosures, long-term financing and higher interest rates. These fees and costs target low-income and higher wage earners equally, but low-wage earners suffer the effects more because the fees represent higher percentages of their disposable incomes.
Bad Credit Loans Gain Increased Respectability in Financial Circles
Financial regulators and politically motivated critics of the industry have proposed many regulations that target payday-style loans such as requiring greater due diligence in processing the loans, limiting interest rates and simply banning the loans in certain states. However, the government’s own Federal Deposit Insurance Corporation released a national study in October of 2014 that found about 34 million households don’t participate in the banking system. Many of these people depend on alternative financial resources like check cashing companies and payday and title loan companies.
It’s natural that people with bad credit turn to alternative resources for loans even if the rates are higher. Used wisely, these loans can save money on late fees and penalties, begin to repair bad credit and provide needed relief when financial pressures become overwhelming. Companies like the PersonalMoneyStore.com offer services to people with bad credit, no credit and those with good credit who have immediate cash emergencies.
While banks engage in questionable practices such as approving larger checks while bouncing multiple smaller checks so that they can charge more fees from their customers, national consumer-interest and political groups seldom criticize these institutions for their financially motivated business practices. Despite criticism of bad credit loans from banks, political strategists and government agencies that stand to lose late fees or want to capitalize on anti-lending sentiments, politicians are beginning to realize that these loans are here to stay because people need them.
Credit Card Debt and Making Minimum Payments Result in Astonishing Interest Charges
Lower interest rates aren’t always better than short-term, higher interest loans. When people in need get one of these loans, they’re more likely to pay off the loan as quickly as possible. Credit card debt and loans from traditional lenders usually don’t generate the same urgency to repay the debt, so people might carry the debt for years and continue to pay interest charges. According to a MarketWatch.com report, paying minimum payments on $2,000 in debt would take 30 years or 370 months to pay off at an 18 percent interest rate. Borrowers would pay $4,931 in interest during the repayment period.
Getting Fast Relief from Cash Flow Problems with Shorter Term Loans
Cash flow problems occur in all types of families for all kinds of reasons, and people appreciate being able to get easy loans with fast approvals. People who live in states that prohibit payday-type short-term loans often travel across state lines to get money when they need it. Numerous studies have found that most people who receive bad credit loans do so because the alternatives would be even more expensive or damaging. Unlike traditional lenders, these lending companies face higher default rates and loans that won’t earn them interest for 30 years. In order to fulfill their business objectives, bad credit loans must have higher interest rates to be economically feasible.
Studies show that vast numbers of consumers manage short-term, payday and installment loans for people with bad credit responsibly without entering a cycle of debt and that the loans provide a cushion against unexpected expenses. People can find out more information about these and other financial topics at the PersonalMoneyStore.com finance blog.