Many hard-working, industrious people have bad credit. It takes very little for a person’s credit score to degrade to the point where they will no longer have access to funds from banks and credit unions or other lenders that loan money at reasonable interest rates. For people who find themselves in this situation, short-term loans are still available. Those with bad credit can use their income stream as a form of advance payment to the creditor.
There are companies that provide short-term personal loans. The loan payments are made from future earnings.
What is a Short Term Loan?
People with bad credit must face the fact that they will have to pay more interest when they borrow money than a person with good credit. If you focus on the APR, annual percentage rate of short term loans, the rate is high. However, when you pay the loan off within the allotted period, it is a reasonably inexpensive way of dealing with a short-term financial problem.
Short term payday loans have advantages that other forms of lending do not have. A great advantage is the speed at which the loan can be approved and arranged. It does not take weeks; it takes hours. The money is made available quickly, so it can be used as a stop gap until next payday.
Banks Don’t Want the Business
Banks do not like to deal with small loans. This is doubly true when the applicant has bad credit. Even in cases where a bank will grant a short-term loan to an individual with poor credit, the interest rate will be high, and it may take weeks before the applicant sees the money. When people need a short-term loan, they need the money now, not later.
