People with bad credit will most likely be denied loan from a bank, unless it is a secured loan wherein a house, a piece of land, a business, or a personal vehicle is used as collateral. But in situations wherein a person with bad credit needs fast cash, with no property to put up as security, the options are limited. There are however payday loans and cash advance loans that are easy on people with bad credit. The whole process is very quick and hassle-free, which makes these kinds of loan in-demand today.
Before applying for payday loans and cash advance loans, understand that there are good lenders, bad lenders, and yes, ugly lenders. Of course you’d want to have nothing to do with the bad and ugly ones, but with so many advertisements and promises shoved at your face every time you search for them online, it is so hard to determine which ones are good and which ones aren’t.
To help you identify them, here are some distinguishable characteristics of each type of cash advance lenders.
These companies are straightforward with their charges, terms, and conditions. They are clear on their loan guidelines, lending policies, and repayment plans. They exhibit appropriate lending practices and not simply grant loan to every person who applies for one. The good ones also have more positive reviews from those who have tried them but be careful when reading reviews as some of them are paid ones and not really accurate or reliable. In a nutshell, good lenders are licensed companies doing business in accordance to the federal and state laws and regulations on lending.
Bad cash advance lenders are those who are quite the opposite of good lenders. They give you false promises, assure you of low interests and yet you end up having to pay large sums of money, because of several hidden charges. Bad lenders are those who do not follow state regulated interest rate caps, which is usually 24% to 48%. You can check the cap for your state just by doing a 2-minute research.
The worst lenders are those who have blatant disregard for the state regulations on payday loans and cash advance loans. They prey on innocent borrowers who do not know any better, with interest rates much, much higher than what’s allowed in the state. These lenders do not have a license to operate precisely because their practices are illegal. They are the ones who will suck your finances until you are basically drowning in debt.
The key is to transact business with good lenders. Do not be misled by advertisements. You can check with the District government or the BBB to see if a lender is licensed or not.