Payday Loans Bad Credit
Bad credit should no longer stop you from getting access to extra funds when you are a bit short on finances. These days, credit-challenged customers can get access to payday loans bad credit and borrow $300-$5000 easily and quickly to pay for whatever urgent expenses they need to settle. Typically offered by specialist lenders, these loans tend to put less weight on credit checks. Credit enquiries are still going to be carried out, but the focus will be shifted towards the borrower’s capacity to comfortably repay the online loan, more than anything else.
For lenders that offer payday loans bad credit, the past missteps you have committed need not affect the chances of you getting access to financing when you need it. After all, there have been many instances of people getting issues with their credit ratings through no fault of their own, but merely due to unfortunate circumstances they found themselves in. This is why when you apply for the payday loans for bad credit borrowers, lenders will be more interested in your present financial situation when deciding whether to approve your application or not.
Understanding payday loans for bad credit borrowers
There are three crucial features that make payday loans bad credit more accessible to credit-challenged borrowers. Among these are:
- Fixed borrowing costs- The fees attached to instant cash loans are capped to prevent lenders from taking advantage of their customers. Setup fees are capped at 20% of the actual loan amount. Repayment fees are also not calculated via APR or annual percentage rates. Instead, the fee is capped at 4% of the loan principal for every repayment.
- Customise your repayment term- Another upside to payday loans bad credit is that you have the freedom to personalise the repayment term to make it work better for you. Typically, you will be allowed to borrow between $300 and $5000. You can have the debt settled in as quick as 16 days. You have the choice to go for an extended term of up to 2 years too, which is ideal for people that want to spread the repayments so it will be more manageable and affordable for them.
- Schedule the repayments per your preferred dates- The loan is designed to work with your personal circumstances which is why you get to decide who you want to schedule the repayments. For instance, if you are getting paid every 10th of the month, you can choose to have your repayments set on the 11th. What’s even better is that this can be combined with direct debit, so you’ll never ever have to worry about missing any due date.
Viewing your credit records
Your credit report reflects a record of your past and current behaviour. It reflects how you behaved as a borrower and how well you have managed credit in the past. If you have had experiences with missed repayments a few years back, expect that this will be reflected on your records. In Australia there are a few credit reporting agencies that people can refer to if they are interested in knowing their credit score.
The credit reporting agency Equifax, will let you get access to your credit report free of charge in the following instances:
- You have been refused credit for the last 3 months
- A correction needs to be made to the report
- Viewing the report once every 12 months
What does a credit report contain?
There are a number of details that will be reflected on your credit score and these entries are going to stay there for different lengths of time. Entries by credit providers will include late payments and defaults will also include details such as how old it has been.
- Missed payments pertain to payments that are late for over 14 days even when they do get settled eventually.
- Defaults are payments that are 60 days overdue or more and are over $150.
Negative entries on credit reports
Negative entries are going to stay on your credit report for varying lengths of time. Often, the nature of the negative entry will play a part in how long it will stay there.
- Bankruptcy- This usually stays on your record whichever of the following is the most recent: a) five years from the date that you have declared bankruptcy or b) two years from the date you were discharged
- Credit enquiries- Will stay on your record for five years
- Credit judgements– Will stay on record for five years
- Repayment history which includes late payments– Will stay on your record for 2 years
- Defaults- Will stay on your record for five years
- Existing credit responsibilities- Will stay on your record for 2 years after they have been completed
Improving your credit report
There are certain steps you can take to help improve your credit standing. Among these are:
- Pay your obligations on time. If you have several negative entries, one way of balancing things out is by taking out small payday loans bad credit and making sure that it is paid back on time. It helps to get your prepaid mobile phone switched to contract.
- Pay close mind to your credit report. Lenders aren’t required to send any written notice whenever they mark late payments, so there is a possibility that they might make errors too. Always check your report regularly to spot problems and to get them corrected.
- Avoid making several loan applications. Lender credit checks will usually remain on your record for 5 years. Too many of these entries will have a negative impact on your score.
Differentiating new and old payday loans bad credit
Payday lenders in Australia need to be approved by the government. To ensure that payday lenders will not abuse their position or exploit borrowers, fee caps are implemented. Instead of being focused on a borrower’s credit report, loan approval is banked on the affordability of the debt and by looking at their bank statements. Lenders have to make sure that customers will be able to afford the repayments comfortably and in a manner that will not put them in an even more precarious financial position.
Modern payday loans bad credit are more accessible. They are also ideal for borrowers that would prefer to settle their debts within a short term. Considering all the restrictions and regulations put in place for these products, they have become safer and fairer financing tools that the rest of the borrowing public can benefit from. These days, regardless of your borrowing history, qualifying for these loans is easy.
These days, many people who cannot access financing from traditional lenders and banks refer to payday loans bad credit to get their hands on extra cash. This is not limited to bad credit borrowers alone, however. Those who rely on Centrelink payments as part or all of the income they are getting every month are more than welcome to apply too. Those who are retired, are currently unemployed as well as those borrowers with little to no credit history can also take advantage of this type of financing and get their money today.
To qualify for a loan, you have to be at least 18 years old and a citizen or permanent resident of Australia. You will also need to show the lender that you are earning enough to afford the loan repayments. In addition, you need to be receiving some form of regular income for the last three months. Lenders will also need you to have an active phone number for them to get in touch with you, along with a working email address. You also need an active bank account as this is where the funds will be transferred directly once your loan gets approved.
Turnaround time for payday loans bad credit
Applying for payday loans is convenient since the whole process is done online. This also ensures that processing, approving and funding the loan will take less time. Just start by filling out the online loan form and submit it. Most of the time, you can get an outcome within 60 minutes. If a lender can offer you a same day loan, they will get in touch with you to provide you with the loan details. If you accept the offer, they will begin the fund transfer. Depending on your bank providers, it is common to expect the funds reflected on your bank account within 24 hours. However, people with NPP-enabled bank accounts can get the funds within minutes.