In bad credit situations, the need to borrow is not inspiring but there is no other option than to settle for a high-interest short-term loan. Sudden unexpected expenses like your loved one ending in an emergency room or car break down or a bill that needs to be paid almost instantly forces you to consider high-interest payday loans.
A payday loan is a good short term option to handle the situation but has been leading borrowers into a viscid debt cycle. On the other hand, there are no credit check loans. For borrowers with bad credit score, the loans that don t check credit is a great option.
How are bad credit installment loans beneficial than the payday loan option?
Borrow more amounts
In many states, the borrowing amount on a payday loan is strictly restricted. The max amount is not more than a couple of hundred dollars. Therefore payday loans do not help handle your large financial needs. Obviously, a payday loan can help to expanse your budget at the end of the month before a paycheck. However, unexpected medical costs or broken car will need more funds than what payday loan can offer.
On the other hand, a bad credit installment loan is available with larger amounts and can bridge your financial needs in a much better way.
Lower interest rates
Annual Percentage Rate is a standard metric to consider when borrowing a payday loan. Because the repayment period is short, interest rates vary a lot from the real APRs. For example, a 2-week payday loan having an interest rate of 15% has APR 391%. It means you pay $391 for a loan amount of $100.
Of course, for bad credit loans, you will have to pay a high-interest rate but its APR is 130%, which is 1/3rd less than payday loan cost. Now, here you can say why to consider the annual percentage rate when you are borrowing short term payday loans. This is a tricky area, which seems a major disadvantage on paper but practically it is minor. It is because the majority of borrowers fail to pay on time and the longer they stay in debt the APRs become higher. They get trapped in the bad debt cycle.
More manageable payments
Borrowers may manage to repay their payday loans but often another budget shortfall gets created and they take another payday loan. No credit check loans have their perks. The amount is large, the payment terms are long, the APR is low and the individual installments to be paid are small and manageable.
It doesn’t matter if you have bad credit, Bonsai Finance find you the relevant lender and funds!
